Evolve. Innovate. Scale. - Jagatjit

Jagatjit Industries Limited

Evolve. Innovate. Scale.

ANNUAL REPORT 2019-20

www.jagatjit.comJagatjit Nagar,

Dist. Kapurthala144 802, Punjab

P: 0181 2783112E: [email protected]

CIN No.: L15520PB1944PLC001970

Annual Report 2019-2020 7mm spineback front

Annual Report 2019-2020 7mm spine

Forward-looking StatementThis report may contain some statements on the Company’s business or financials which may be construed as forward-looking based on the management’s plans and assumptions. The actual results may be materially different from these forward-looking statements although we believe we have been prudent in our assumptions.

STATUTORY REPORTS 09-28Board’s Report… 09Management Discussion & Analysis… 26

30-136FINANCIAL STATEMENTSFinancial Statements (Standalone)… 30Financial Statements (Consolidated)… 83

CORPORATE OVERVIEW 01-08

Inside Stories

Evolve. Innovate. Scale.… 01

About Us... 02

Vision Statement and Core Values… 03

Our Iconic Brands… 04

New Launches… 05

Our Key Verticals… 06

Our Performance Scorecard… 07

Corporate Information… 08

front inside back insideAnnual Report 2019-2020 7mm spine





Inside Stories


About Us... 02



New Launches… 05




front inside back inside

We are India’s renowned alcoholic beverage company on a missio to constantly evolve and innovate to build competitive advantages and deliver sustainable growth and scale.

Our attractive suite of iconic brands, rich experience and deep insights, wide franchise and customer base is supported by well-established processes. We constantly leverage our rich legacy and remain laser-focussed to evolve our business to deliver more and more value to our customers, shareholders and other stake -holders.

We are an asset-light, low-working capital model that helps us scale higher and faster. We are constantly redefining ourselves to deliver world-class aged and matured alcoholic spirits, furthering India’s position as a whisky hub.

We are so dedicated towards our mission that during the times of a pandemic, we immediately shifted our focus on creating a brand of hand sanitisers.

Our focus continues to be on product development, packaging, and implementation of new technology. We are so dedicated to our mission that we undertook a restructuring exercise to become leaner and fitter. We reduced production costs and inventory levels, upgraded technology and transformed our business in order to optimise and increase our e�ciencies and regain market share. As we strive to scale, sustainability remains our key philosophy.

Evolve.Innovate.Scale.

Manufacturing quality We produce an entire range of alcoholic beverages, i.e.,

Scotch, Whisky, Rum, Gin, Vodka, Brandy and Country

Liquor. We are ranked among the large IMFL producers

in India and our brands are well trusted and respected.

Sustaining legacy Of our founding principles, ensuring quality and customer

delight, which is kept intact in the DNA of our brands. We

are expertly balancing the richness of our legacy, with the

dynamism of this digital age.

Expanding reach Our manufacturing unit for IMFL, country liquor, malt

extract and malted milk-food is located at Jagatjit Nagar,

Hamira in District Kapurthala, Punjab. Additionally, we have

a bottling unit at Alwar (Rajasthan). Our brands are also

being manufactured through our Supply Partners / Franch

-isees at around 21 locations across India.

Exploring heritageWe take pride in and take advantage of our unique distinction

of being one of Asia’s largest integrated distillery manu

-facturing potable alcohol, and producers of malt spirit.

Constant evolution We are always redefining our methodologies & rejuvenating

our brands, keeping up with our belief in embracing moder

-nisation to keep abreast of changing times and trends.

Keeping promisesOur promise is to provide superior brands to our customers

at a�ordable prices.

Living our philosophyOur philosophy - “A Heritage of Quality” - finds expression

at all levels of its activities: quality in manufacturing,

technology and in its relationships with its employees,

dealers and customers.

Elaborate portfolio Our portfolio includes Whiskies (Scotch and Blended Indian

Whiskies), Gin, Rum, Brandy and Vodka. We also produce

malt spirit at our malt spirit plant, an important ingredient

for making whisky blends.

About Us A seven-decade old alcoholic beveragecompany incorporated in the year 1944in the state of Punjab, with a primary focuson manufacturing, distributing and sellingIMFL (Indian Made Foreign Liquor) and Country Liquor (CL).

Manufacturing quality We produce an entire range of alcoholic beverages, i.e.,

Scotch, Whisky, Rum, Gin, Vodka, Brandy and Country

Liquor. We are ranked among the large IMFL producers

in India and our brands are well trusted and respected.

Sustaining legacy Of our founding principles, ensuring quality and customer

delight, which is kept intact in the DNA of our brands. We

are expertly balancing the richness of our legacy, with the

dynamism of this digital age.

Expanding reach Our manufacturing unit for IMFL, country liquor, malt

extract and malted milk-food is located at Jagatjit Nagar,

Hamira in District Kapurthala, Punjab. Additionally, we have

a bottling unit at Alwar (Rajasthan). Our brands are also

being manufactured through our Supply Partners / Franch

-isees at around 21 locations across India.

Exploring heritageWe take pride in and take advantage of our unique distinction

of being one of Asia’s largest integrated distillery manu

-facturing potable alcohol, and producers of malt spirit.

Constant evolution We are always redefining our methodologies & rejuvenating

our brands, keeping up with our belief in embracing moder

-nisation to keep abreast of changing times and trends.

Keeping promisesOur promise is to provide superior brands to our customers

at a�ordable prices.

Living our philosophyOur philosophy - “A Heritage of Quality” - finds expression

at all levels of its activities: quality in manufacturing,

technology and in its relationships with its employees,

dealers and customers.

Elaborate portfolio Our portfolio includes Whiskies (Scotch and Blended Indian

Whiskies), Gin, Rum, Brandy and Vodka. We also produce

malt spirit at our malt spirit plant, an important ingredient

for making whisky blends.

About Us A seven-decade old alcoholic beveragecompany incorporated in the year 1944in the state of Punjab, with a primary focuson manufacturing, distributing and sellingIMFL (Indian Made Foreign Liquor) and Country Liquor (CL).

7.2 Million CasesPer Annum

IndianManufacturedForeign Liquor

4.2 Million CasesPer Annum

Country Liquor

39,600 MT PerAnnum

Malted Milk Food

13,800 MT PerAnnum

Malted Extract

ISO 22000 : 2018

Food SafetyStandardCertified

40

Total LiquorBrands

Jagatjit Industries Limited | 03

Corporate Overview

Our Core Values

We takeownership for

the work we do

We workcollaboratively as

a team toensure success

We pullthe Andon cordas soon as wesee a problem

We encouragecreativity andout of the box

thinking

We arenever too old

to learn

We domore with less

We exhibitprofessionalism to our colleagues

and partners

We valuemerit-based

growth

We areefficient through

technology

We actwith speedand agility

Our Manufacturing Capacities

Vision StatementIconic impactful brands that always make you feel better

Our Iconic Brands

Annual Report 2019-20

04

We have a rich and diverse portfolio of Whisky, Gin, Rum, Brandy, Vodkaand Scotch. As part of a restructuring exercise, we are streamlining ourportfolio and consolidating our presence and market share across India.

Royal Pride Exquisite Whisky

AristocratPremium Whisky

AC NeatWhisky

AC Sek CWhisky

AristocratWhisky

Bonnie SpecialWhisky

Binnie’s FineWhisky

Aristocrat Old Reserve

Whisky

AC BlackWhisky

Aristocrat DryGin

ACRoyale

King HenryDamn Good Scotch

AristocratVodka

IICEVodka

GIN

SCO

TCH

VO

DK

A

Royal Medallion

WH

ISK

YB

RA

ND

Y

AristocratRum

RU

M

Corporate Overview


New Launches

AC RoyaleKing HenryDamn Good Scotch

Royal Medallion


06

Our Key Verticals

Engaged in manufacturing of high-quality country liquor in theState of Punjab.

Country Liquor

Engaged in production of Whisky, Rum, Gin, Vodka and Brandy.

Operations in most states of India with exports to Africa andMiddle East for semi-deluxe and below categories.

Indian Made Foreign Liquor

Long-term contract with Hindustan Unilever Limited to manufacture intermediates for their products ‘Boost’ and ‘Horlicks’.

Engaged in production of high-quality food & distillery grade maltwith best barley, for internal requirement and external sales.

Food – Malted MilkFood andMalt Extract

Engaged in leasing of owned properties for rentals.

Own a 2 Lac Sq. Ft. property in Gurugram spread across 4 acresand a 23,000 Sq. Ft. property at Ashoka Estate, ConnaughtPlace, New Delhi.

Real Estate

Distribution across India and international markets.

Engaged in producing high quality ethanol.

Presence in US and Indian markets.

Launched during the pandemic.

Distillery Sanitizer

Corporate Overview


Our Performance Scorecard(` in Lacs or as indicated)Assets

Fixed Assets (Net Block)

Investments (Current & Non Current)

Current and Non Current Assets

Total

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

2011-12*

2010-11*

37,286 41,333 42,391 43,304 29,742 32,762 34,284 32,348 34,450

32,340

76,728

32,431 43,542 50,787 45,433 48,784 48733 40,453

77,929 76,10681,37984,38679,42481,71289,964

2019-20***

1,823

2018-19***

38,070

21,814

63,519

3,635 3,055 3,107 3,118 1,183 1,229 1,318 298 1,203

11,481

50,590

Liabilities

Loans, Liabilities and Provisions(Current & Non Current)

NET WORTH

2018-19***

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

2011-12*

2010-11*

46,555 54,319 60,556 54,225 54,565 54,888 47,559 47,705 44,894 41,955

9,200 16,172 23,704 34,15136,48536,68131,86526,82435,399

2019-20***

4,035

Net Worth Represented by

Equity Share CapitalReserves and Surplus

Total

2018-19***

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

2011-12*

2010-11*

4,615 4,615 4,615 4,615 4,615 4,615 4,615 4,615 4,615 4,615

( 580 ) 4,585 11,557 19,089 30,784 22,209 27,250 32,066 31,870 29,536

9,200 16,172 23,704 34,15136,48536,68131,86526,82435,399

2019-20***

4,035

Operating Performance

Revenue

Gross Profit EarningsProfit before TaxProfit after Tax/Total Comprehensive IncomeEarning per Share (`)

Dividend

Amount per Share (`)

Rate (%)Book Value per Equity Share (`)

Gross Earnings

As a percentage of RevenueAs a percentage of Fixed Assets

2018-19***

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

2011-12*

2010-11*

( 11.7 ) ( 18.7 )

( 8.6 ) ( 14.9 )

As a percentage of Capital Employed ( 10.3 ) ( 13.2 )

( 11.5 )

( 15.8 )

( 12.5 )

( 12.0 )

( 23.9 )

( 18.0 )

4.5

18.5

11.3

3.3

16.4

9.2

1.7

7.1

3.9

( 1.8 )

( 7.4 )

( 4.1 )

( 4.7 )

( 12.6 )

( 8.1 )

( 3.5 )

( 14.6 )

( 7.5 )

2019-20***

* based on Revised Schedule VI of the Companies Act, 1956.** based upon Schedule III of the Companies Act, 2013.***based on IND AS

2010-11*

1,41,370

6,382

3,5072,526

5.79

2011-12*

1,60,484

5,310

2,8473,510

8.04

2018-19***

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

27,331 30,387

( 3,198 ) ( 5,686 )

( 4,163 ) ( 6,730 )( 5,165 ) ( 6,627 )

( 11.20 ) ( 15.09 )

56,710

( 6,547 )

( 7,759 )( 7,433 )

( 16.97 )

84,758

( 10,130 )

( 11,402 )(11,695 )

( 26.18 )

1,45,101

2,418

668505

1.16

1,37,081

( 2,417 )

( 4,266 )( 4,523 )

( 10.36 )

1,15,351

( 5,445 )

( 6,716 )( 6,565 )

( 15.04 )

1,24,268

( 4,341 )

( 5,584 )( 4,365 )

( 10.00 )

2019-20***

2018-19***

2017-18***

2016-17***

2015-16***

2014-15**

2013-14*

2012-13*

2011-12*

2010-11*

0.00 0.00

0 0

8.74 19.93

0.00

0

35.04

0.00

0

51.36

0.00

0

74.00

0.00

0

79.06

0.00

0

79.48

0.00

0

69.05

0.00

0

76.70

0.00

0

58.12

2019-20***

Corporate Information

Board of Directors Registered O�ce& WorksMr. Ravi Manchanda

Managing Director

Mrs. Kiran KapurNon-executive Independent Director

Mrs. Anjali VarmaNon-executive Director

Ms. Sonya JaiswalNon-executive Independent Director

Mrs. Asha SaxenaNon-executive Independent Director

Mrs. Sushma SagarNon-executive Director

AuditorsM/s. Madan & AssociatesChartered AccountantsNew Delhi(Firm Registration Number 000185N)

Jagatjit Nagar,Dist. Kapurthala - 144 802,Punjab

4th Floor, Bhandari House,91, Nehru Place,New Delhi - 110 019

Listed onBSE Limited

Corporate O�ce

Main BankersCanara Bank

Union Bank of India

Punjab National Bank

HDFC Bank

Indusind Bank


08


Dear members,

Your Directors have pleasure in presenting the 75th (Seventy Fifth) Annual Report on the business and operations of your Company alongwith the Audited Financial Statements for the Financial Year ended March 31, 2020.

FINANCIAL SUMMARY

The Board Report is prepared on the basis of standalone financial statements of the Company. The Company’s financial performance forthe year under review along with previous year’s figures is given hereunder:

(` in Lacs)

2019-20 2018-19

Profit/(Loss) for the year after charging all expenses excluding financing charges and (1794) 1316depreciation

Deduct : Financing Charges 4211 7259

Cash Profit/(Loss) (6005) (5943)

Deduct: Depreciation/Amortization 965 1044

Profit/(Loss) for the year before taxation and exceptional Items (6970) (6987)

Exceptional Items (Income) 2868 373

Profit/(Loss) for the year before taxation and after exceptional Items (4102) (6614)

Tax Expenses

- Previous Year Tax Adjustment - 92

- Derecogition of MAT Credit 968 -

- Deferred Tax (Benefit)/Charge (244) (234)

Profit/(Loss) after tax from discontinuing operations (61) (116)

Profit/(Loss) after tax for the year (4887) (6588)

Other Comprehensive Income

- Re-Measurement (Gains)/Losses on defined Benefit Plans 278 60

- Tax Impact on Re-Measurement (Gains)/Losses on defined Benefit Plans - (21)

Total Comprehensive Income for the period (5165) (6627)

STATE OF COMPANY’S AFFAIRS

During the year under review, the Gross Turnover (including incomefrom Services & Other Sources) was ` 27,331 Lacs as comparedto ` 30,387 Lacs during the previous year. The Company incurreda loss before taxation of ` 4,102 Lacs as compared to loss beforetaxation of ` 6,614 Lacs during the previous year.

In view to meet the requirements of hand sanitizers due to increaseddemand of the same on account of spread of Covid-19, the Companyhas introduced Hand Sanitizers and accordingly entered intoarrangement(s) with various parties for manufacture/procurementof Hand Sanitizers for sales/ distribution against supply ofDenatured Alcohol by the Company. The product of the Companyappears to be well accepted in the market as per initial reports.

TRANSFER TO GENERAL RESERVE

In view of losses, no amount has been transferred to GeneralReserve.

DIVIDEND

In view of the losses incurred by the Company during the year under

review, the Board of Directors of your Company do not recommendany dividend.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTINGTHE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financialposition of the Company occurred between the end of the financialyear to which these financial statements relate and the date ofthis Report.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

During the year under review, there was no material change in thenature of business of the Company.

SHARE CAPITAL

During the year under review, there was no change in the Authorizedor Paid-up share capital of the Company.

FIXED DEPOSITS

During the year under review, the Company has not accepted anydeposits, falling within the ambit of Section 73 of the Companies

Boards’ Report

Statutory Reports


10

Act, 2013 (“the Act”) and the Companies (Acceptance of Deposits)Rules, 2014.

As on March 31, 2020, 56 persons whose Fixed Deposits/Loanswith the Company amounting to ` 43.97 Lacs had become due forpayment during the year, did not claim their Deposits/Loans. Outof these, Fixed Deposits/Loans of 6 persons amounting to ` 1.70Lacs have since been paid.

During the year under review, there has been no default inrepayment of deposits or interest thereon.

HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Holding Company:

M/s LPJ Holdings Private Limited holds 83.90% voting rights inthe Company i.e Jagatjit Industries Limited and by virtue of suchholding M/s Jagatjit Industries Limited continued to be subsidiarycompany of M/s LPJ Holdings Private Limited as per the provisionof Section 2(87) of the Companies Act, 2013.

Subsidiary and Associate Companies:

During the year under review, M/s. JIL Trading Private Limited,M/s. L. P. Investments Limited, M/s. Sea Bird Securities PrivateLimited, M/s. S. R. K. Investments Private Limited and M/s. YoofyComputech Private Limited continued to be the subsidiarycompanies of the Company.

During the year under review, the Company had made investmentby way of subscribing 100% equity shares of newly incorporatedCompany M/s Natwar Liquors Private Limited, consequently, itbecame wholly owned subsidiary of the Company.

During the year under review, M/s. Hyderabad Distilleries &Wineries Private Limited continued to be an Associate Companyof the Company.

CONSOLIDATED FINANCIAL STATEMENTS

The Consolidated Financial Statements of your Company for theFinancial Year 2019-20 are prepared in compliance with theapplicable provisions of the Act, Indian Accounting Standards (“IndASs”) and the Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations, 2015 ((SEBI(LODR) Regulations) which shall be placed before the members intheir forthcoming Annual General Meeting (AGM).

In accordance with Section 129 (3) of the Act, a statementcontaining the salient features of the financial statement ofsubsidiary/ associate/ joint venture companies is provided asAnnexure in Form AOC – 1 to the consolidated financial statementsof the Company and therefore not repeated to avoid duplication.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

There was no change in the composition of the Board during thefinancial year 2019-20.

Retirement by Rotation

In accordance with the provisions of Section 152 of the Act and interms of the Articles of Association of the Company, Mrs. AnjaliVarma (DIN: 01250881), Non-Executive Director is liable to retireby rotation at the ensuing AGM and being eligible, offers herself forre-appointment. Your Board recommends her re-appointment.

Key Managerial Personnel

During the year under review, Mr. Ravi Manchanda, ManagingDirector and Mr. Anil Girotra, Chief Financial Officer, continued tobe the Key Managerial Personnel of your Company.

Mr. K. K. Kohli, ceased to be Company Secretary of the Companyw.e.f July 15, 2019 and the Board of Directors, upon therecommendation of the Nomination and Remuneration Committee,in its Meeting held on July 15, 2019, approved the appointment ofMr. Roopesh Kumar, as Company Secretary and Compliance Officerof the Company w.e.f. July 15, 2019.

The Board of Directors, upon the recommendation of theNomination and Remuneration Committee, in its Meeting held onOctober 21, 2019, approved the appointment of Mr. Anil Vanjani,as Chief Executive Officer of the Company w.e.f. October 21, 2019.

MEETINGS OF THE BOARD AND ITS COMMITTEES

The number of meetings of the Board and various Committeesthereof are set out in the Corporate Governance Report whichforms part of this report. The intervening gap between the meetingswas within the period prescribed under the Act and SEBI (LODR)Regulations, as applicable.

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) read with Section 134 (5) of theAct, the Directors state that:

(a) in the preparation of Annual Accounts for the year endedMarch 31, 2020, the applicable Accounting Standards havebeen followed along with proper explanation relating to materialdepartures;

(b) the Directors have selected such accounting policies andapplied them consistently and made judgments and estimatesthat are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the Company forthat period;

(c) the Directors have taken proper and sufficient care for themaintenance of adequate accounting records in accordancewith the provisions of the Companies Act, 2013 forsafeguarding the assets of the Company and for preventingand detecting fraud and other irregularities;

(d) the Directors have prepared the annual accounts of theCompany on a going concern basis;

(e) the Directors have laid down internal financial controls to befollowed by the Company and that such internal financialcontrols are adequate and were operating effectively; and

(f) the Directors have devised proper systems to ensurecompliance with the provisions of all applicable laws and thatsuch systems are adequate and operating effectively.

Details in respect of frauds reported by auditors :

There was no instance of fraud reported by the Auditors.

DECLARATION BY INDEPENDENT DIRECTORS

Your Company has received necessary declarations from eachIndependent Director that he/she meets the criteria of


independence as laid down under the Act read with Schedule IVand Rules made thereunder, as well as SEBI (LODR) Regulationsincluding any amendment thereof. The Board considered theindependence of each of the Independent Directors in terms ofabove provisions and is of the view that they fulfill / meet the criteriaof independence.

NOMINATION AND REMUNERATION POLICY OF DIRECTORS,KEY MANAGERIAL PERSONNEL AND OTHER EMPLOYEES

In accordance with the provisions of Section 178(1) of the Actread with Rules made thereunder and SEBI (LODR) Regulations,based on the recommendations of the Nomination andRemuneration Committee, the Board of Directors of the Companyhave approved a policy on nomination and remuneration ofDirectors, Key Managerial Personnel and other employees includingcriteria for determining qualifications, positive attributes,independence of a director and other matters provided u/s 178(4).The broad parameters covered under the Policy are:

• Principle and Rationale

• Company Philosophy

• Guiding Principles

• Nomination of Directors

• Remuneration of Directors

• Evaluation of the Directors

• Nomination and Remuneration of the Key ManagerialPersonnel (other than Managing/ Whole-time Directors), Key-Executives and Senior Management.

• Remuneration of other employees.

The Company’s Policy relating to appointment of Directors, paymentof Managerial remuneration, Directors’ qualifications, positiveattributes, independence of Directors and other related mattersas provided under Section 178(3) of the Act is given in separateAnnexure to this report. The policy is also available on the websiteof the Company i.e. www.jagatjit.com.

The above Annexure is not being sent along with this Report to themembers of the Company in line with the provisions of Section136 of the Act. The aforesaid Annexure is available for inspectionby Members at the Registered Office of the Company up to thedate of the ensuing AGM during the business hours on workingdays, except Saturdays. Members who are interested in obtainingthese particulars, may write to the Company Secretary at theRegistered Office of the Company.

ANNUAL PERFORMANCE EVALUATION

Pursuant to the provisions of Section 134 (3) (p) of the Act and therules made thereunder, the Board was required to carry out theAnnual Performance Evaluation of the Board, its Committees andindividual Directors. Additionally, as per provision of Regulation 17(10) of SEBI (LODR) Regulations and Schedule IV of the Act, theperformance evaluation of the independent directors was also tobe done by the Board of Directors. Accordingly, the Board hascarried out the annual evaluation of the Directors individuallyincluding the Independent Directors (wherein the concerneddirector being evaluated did not participate), Board as a whole, andfollowing Committees of the Board of Directors:

i) Audit Committee;

ii) Nomination and Remuneration Committee;

iii) Stakeholders’ Relationship Committee; and

iv) Corporate Social Responsibility Committee.

The evaluation concluded by affirming that the Board as a whole aswell as all of its Members, individually and the Committees of theBoard continued to display commitment to good governance,ensuring a constant improvement of processes and procedures.

It was acknowledged that every Director and the Committee of theBoard contributed its best in the overall performance of theCompany.

EXTRACT OF ANNUAL RETURN

In accordance with the provisions of Section 92 of the Act readwith the Companies (Management and Administration) Rules,2014, the extract of Annual Return of the Company in Form MGT-9 is available on the website of the Company at www.jagatjit.com.

AUDITORS AND AUDITORS’ REPORT

The Members of the Company vide their resolution passed at the72nd (Seventy Second) AGM read with their resolution passedthrough postal ballot on November 10, 2017 appointed M/s.Madan & Associates, Chartered Accountants (Firm RegistrationNumber 000185N) as the Statutory Auditors of the Company whoshall hold office of Statutory Auditors until the conclusion of 76th

(Seventy Sixth) AGM of the Company to be held for the financialyear 2020-21.

The Statutory Auditors in their report for the financial year endedMarch 31, 2020 have made certain qualifications/remarks whichforms part of this Report alongwith Board’s explanations andcomments and is annexed herewith as Annexure-1.

Other observations of the Statutory Auditors in their Report onstandalone and consolidated financial statements for the yearended March 31, 2020 are self-explanatory and therefore do notcall for any further comments.

SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Act read withcorresponding Rules framed thereunder, M/s. Saqib & Associates,Company Secretaries were appointed as the Secretarial Auditorsof the Company to carry out the Secretarial Audit of secretarialand related records of the Company for the Financial Year endedMarch 31, 2020.

A Secretarial Audit Report submitted by the Secretarial Auditorsin Form No. MR-3 forms part of this report and is annexed herewithas Annexure-2.

ANNUAL SECRETARIAL COMPLIANCE REPORT

A Secretarial Compliance Report for the financial year ended March31, 2020 on compliance of all applicable SEBI Regulations andcirculars/guidelines issued thereunder, as received from M/sSaqib & Associates, Secretarial Auditors, was submitted to theBombay stock exchange.

COST AUDIT

In terms of Section 148 of the Act and the Companies (Cost

Statutory Reports


12

Records and Audit) Rules, 2014 and any amendment thereto, CostAudit is not applicable to the Company.

INTERNAL FINANCIAL CONTROLS

The Company generally has in place adequate Internal FinancialControls with reference to financial statements. During the year,such controls were tested, and the Auditors reported that theCompany generally has, in all material respects, an adequateinternal financial controls system over financial reporting and suchinternal financial controls over financial reporting were generallyoperating effectively as at March 31, 2020, except in respect oftrade receivable reconciliation/ confirmation, provision for bad anddoubtful debts and accounts payable reconciliation/ confirmationwhere controls were found to be ineffective. The Board’s responsewith respect to the trade receivable reconciliation, provision forbad and doubtful debts and accounts payable reconciliation/confirmation is mentioned in Annexure – 1 to this report. Further,the Auditors have stated that in some areas the controls wereeffective but need to be strengthened. The Company is takingnecessary steps to further strengthen the same. The report onthe Internal Financial Control issued by M/s. Madan & Associates,Chartered Accountants, the Statutory Auditors of the Company inview of the provisions under the Act is annexed to the Audit Reporton the Financial Statements of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under theprovisions of Section 186 of the Act are given in the notes to theFinancial Statements.

RELATED PARTY TRANSACTIONS

All contract / arrangement / transactions entered into by theCompany with Related Parties, as defined under the Act and SEBI(LODR) Regulations, during the Financial Year 2019-20 were atarm’s length basis and in the ordinary course of business. As perthe provisions of Section 188 of the Act, and Rules madethereunder read with Regulation 23 of SEBI (LODR) Regulations,your Company has obtained necessary approval of the AuditCommittee before entering into such transactions and the samehas been reviewed periodically.

Your Company has framed a Policy on Related Party Transactionsin accordance with SEBI (LODR) Regulations and as per theamended provisions of the Act. The Policy intends to ensure thatproper reporting, approval and disclosure processes are in placefor all transactions between the Company and related parties. Thepolicy is uploaded at the website of the Company at www.jagatjit.com

During the year, the Company has not entered into any contract /arrangement / transaction with related parties which could beconsidered material in accordance with the aforesaid Policy of theCompany on Related Party Transactions.

None of the transactions with any of the related parties were inconflict with the interest of the Company. Rather, they synchronisedand synergised with the Company’s operations. Attention ofMembers is drawn to the disclosure of transactions with the relatedparties set out in Note No. 39 of the Standalone FinancialStatements, forming part of the Annual Report.

Since all the transactions which were entered into during theFinancial Year 2019-20 were on an arm’s length basis and werein the ordinary course of business and there was no material relatedparty transaction entered by the Company during the Financial Year2019-20 as per Related Party Transactions Policy, hence no detailsare required to be provided in Form AOC-2 prescribed under Clause(h) of Sub-section (3) of Section 134 of the Act and Rule 8(2) of theCompanies (Accounts) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY [CSR]

The composition, role, functions and powers of the Corporate SocialResponsibility (CSR) Committee of the Company are in accordancewith the requirements of the Act. Presently, the CSR Committeecomprises of Mrs. Kiran Kapur (Independent Director); Mrs. AnjaliVarma (Non-Executive Director) and Mr. Ravi Manchanda(Managing Director) as Members.

The CSR Policy of the Company as approved by the CSR Committeeis also available on the website of the Company at www.jagatjit.com.

During the year under review, the Company did not meet therequirement of Section 135(5) of the Act, therefore, no suchactivities were required to be undertaken by the Company.

RISK MANAGEMENT

The Company is aware of the risks associated with the business. Itregularly analyses and takes corrective actions for managing /mitigating the same. Your Company’s Risk management frameworkensures compliance with the provisions of SEBI (LODR) Regulations.Your Company has institutionalized the process for identifying,minimizing and mitigating risks which is periodically reviewed. Someof the risks identified and been acted upon by your Company are:securing critical resources; ensuring sustainable plant operations;cordial relations with the workers, ensuring cost competitivenessincluding logistics; maintaining and enhancing customer servicestandards and resolving environmental and safety related issues.

The Board of Directors has adopted a formal Risk ManagementPolicy for the Company and the same is available at the website ofthe Company at www.jagatjit.com. The Policy outlines theparameters of identification, assessment, monitoring and mitigationof various risks which are key to business objectives.

REMUNERATION OF DIRECTORS, KEY MANAGERIALPERSONNEL AND PARTICULARS OF EMPLOYEES

The information required to be disclosed in the Board’s Reportpursuant to Section 197 of the Act read with Rule 5 of theCompanies (Appointment and Remuneration of ManagerialPersonnel) Rules, 2014 for the year ended March 31, 2020 isgiven in a separate Annexure to this report.

The above annexure is not being sent along with this Report to themembers of the Company in line with the provision of Section 136of the Act. The aforesaid Annexure is available for inspection byMembers at the Registered Office of the Company upto the date ofthe ensuing AGM during the business hours on working days, exceptSaturdays. Members who are interested in obtaining theseparticulars may write to the Company Secretary at the RegisteredOffice of the Company.


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION ANDFOREIGN EXCHANGE EARNING AND OUTGO

The information pertaining to conservation of energy, technologyabsorption, foreign exchange earnings and outgo as required underSection 134(3)(m) of the Act read with Rule 8(3) of the Companies(Accounts) Rules, 2014 forms part of this report and is annexedherewith as Annexure-3.

CORPORATE GOVERNANCE

Your Company upholds the standards of governance and iscompliant with the Corporate Governance provisions as stipulatedunder SEBI (LODR) Regulations in both letter and spirit. TheCompany’s core values of honesty and transparency have since itsinception been followed in every line of decision making. Setting thetone at the top, your Directors cumulatively at the Board level,advocate good governance standards at the Company. YourCompany has been built on a strong foundation of good CorporateGovernance.

Parameters of Statutory compliances evidencing the standardsexpected from a listed entity have been duly observed and a Reporton Corporate Governance as well as the Certificate from a firm ofPracticing Company Secretaries confirming compliance with therequirements of Regulation 34 read with Schedule-V of the SEBI(LODR) Regulations forms part of this report and is annexedherewith as Annexure-4 and 5 respectively.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report as stipulatedunder Regulation 34 read with Schedule-V of the SEBI (LODR)Regulations is presented in separate section forming part of theAnnual Report.

LISTING OF SHARES OF THE COMPANY

The shares of your Company are listed on the BSE Limited. TheListing fees for the Financial Year 2020-21 has been paid to theBSE Limited.

RESEARCH AND DEVELOPMENT (R&D)

The Company takes regular steps for R&D in the manufacturingprocess and optimum utilization of its resources. No capitalinvestment was made for R&D during the year under review.

CAUTIONARY STATEMENT

Statements in the Board’s Report and the Management Discussion& Analysis describing the Company’s objectives, expectations orforecasts may be forward looking within the meaning of applicablesecurity laws and Regulations. Actual results may differ materiallyfrom those expressed in the statement. Important factors thatcould influence the Company’s operations include global anddomestic demand and supply conditions affecting selling prices offinished goods, input availability and prices, changes in governmentRegulations, tax laws, economic developments within the countryand other factors such as litigation and industrial relations.

DISCLOSURES IN RELATION TO THE SEXUAL HARASSMENT OFWOMEN AT WORKPLACE (PREVENTION, PROHIBITION ANDREDRESSAL) ACT, 2013:

The Company is committed to providing and promoting a safe and

healthy work environment for all its employees. The Company hasin place an Anti Sexual Harassment policy in line with therequirements of The Sexual Harassment of women at theWorkplace (Prevention, Prohibition & Redressal) Act, 2013. InternalComplaints Committee (ICC) has been set up to redress complaintsreceived regarding sexual harassment.

(a) number of complaints filed during the financial year – Nil

(b) number of complaints disposed of during the financial year –Nil

(c) number of complaints pending as on end of the financial year– Nil

GENERAL

Your Directors state that no disclosure or reporting is required inrespect of the following items as there were no transaction onthese items during the year under review:-

1. Issue of equity shares with differential voting rights as todividend, voting or otherwise.

2. The Managing Director of the Company does not receive anyremuneration or commission from any of its subsidiaries.

3. No significant or material orders were passed by theRegulators or Courts or Tribunals which impact the goingconcern status and Company’s operations in future.

4. Sweat Equity Shares.

5. Further, the Board of Directors also confirm that the Companyis in the regular compliance of applicable provisions ofSecretarial Standards issued by the Institute of CompanySecretaries of India.

ACKNOWLEDGEMENT

The Directors wish to place on record their appreciation for thesincere services rendered by employees of the Company at all levels.Your Directors also wish to place on record their appreciation forthe valuable co-operation and support received from theGovernment of India, State Governments, the Banks / FinancialInstitutions and other stakeholders such as, shareholders,customers and suppliers, among others. The Directors alsocommend the continuing commitment and dedication of theemployees at all levels, which has been critical for the Company’ssuccess. The Directors look forward to their continued support infuture.

For and on behalf of the BoardFor Jagatjit Industries Limited

Ravi Manchanda Sushma SagarManaging Director Director(DIN.00152760) (DIN. 02582144)

Date: September, 03 2020Place: New Delhi

Statutory Reports


14

The remarks made by the Statutory Auditors in theirIndependent Audit Report are as follows: -

Point No. 1

Company has a policy of providing for (a) all debts outstandingbeyond 3 years or (b) where recovery is considered doubtfulirrespective of the fact that legal action has been initiated or not,instead on the method prescribed under IND AS 109. Companydoes not have effective system of obtention of confirmations fromTrade Receivables/ Payables (including confirmation of RegisteredMSME Suppliers) and other Advances. The financial impact of thisis not ascertainable and to that extent we cannot comment uponthe adequacy of provision for Expected Credit loss/doubtful debts/advances to the suppliers. However, non-moving debts andadvances to suppliers outstanding beyond 1 year are to the extentof ` 1564 Lakhs which is static balance for which confirmationsand reconciliations are not available and have not been providedfor.

Further, Trade payables, Loan & advance and trade receivable(other than above) are subject to reconciliation & confirmation.The financial impact of all this is not ascertainable and to that extentwe cannot comment upon the veracity of such balances.

The Board’s explanations and comments on the above are asfollows:

The Company takes necessary steps for reconciliations of itsaccounts with trade receivables/payables and other advances inthe ordinary course of business. Any differences which result outof reconciliations are resolved / adjusted in the accounts. TheCompany always takes necessary steps for speedy recovery of thereceivables outstanding. The Management is of the view that theTrade receivables/payables and other advances as shown in thestatement of accounts are debts considered good and recoverablein due course of time. The impact, if any, can be quantified onlyafter receipt of confirmation/ reconciliation from remaining parties.

Annexure-1

Point No. 2

The Company has written back interest payable of ` 216 Lakhs(provided prior to FY 2018-19) to unidentified MSME suppliers.Management is of view that these are unidentified and liability nolonger required.


Management is of the view that these are unidentified and liabilityno longer required. Further the Company has made adequateinterest provision for identifiable MSME Suppliers.

Point No. 3

Physical verification of inventories: Due to Covid-19 Pandemiclockdown management could not conduct the physical verificationof all inventories at reporting date. It is informed by the managementthat physical verification was conducted subsequently and nomaterial discrepancy was found.

We were not able to attend the physical verification as lockdownwas effective, therefore, we were unable to verify the existence/condition of inventories of ̀ 1485 Lakhs raw material, ̀ 243 Lakhspacking materials, ` 501 Lakhs work-in-progress, ` 1441 Lakhsfinished goods, ` 19 Lakhs stock-in-trade and ` 499 Lakhs storesand spares to determine the adjustments that may be required tobe made in the value of inventory and consequential effect thereofon financial statement as on March 31, 2020.


Due to Covid-19 Pandemic lockdown the Management could notconduct the physical verification of all inventories as at the reportingdate. However on later dates physical verification was done by anindependent firm of Chartered Accountants and necessary carewas exercised to arrive at the realisable value of inventories. Thereare no material differences.


To,The Members,Jagatjit Industries Limited,Jagatjit Nagar, Dist. Kapurthala,Punjab - 144802

We have conducted the Secretarial Audit of the compliance ofapplicable statutory provisions and the adherence to good corporatepractices by Jagatjit Industries Limited (hereinafter called “theCompany”) for the audit period covering the financial year endedon 31st March, 2020 (“Audit Period”). Secretarial Audit wasconducted in a manner that provided us a reasonable basis forevaluating the corporate conducts/statutory compliances andexpressing our opinion thereon.

Based on our verification of the Company’s books, papers, minutebooks, forms and returns filed and other records maintained bythe Company and also the information provided by the Company,its officers, agents and authorized representatives during theconduct of Secretarial Audit, the explanations and clarificationsgiven to us and the representations made by the Management, wehereby report that in our opinion, the Company has, during theaudit period under consideration complied with the statutoryprovisions listed hereunder and also that the Company has properBoard processes and compliance-mechanism in place to the extent,in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms andreturns filed and other records maintained by the Company for thefinancial year ended on 31st March 2020, according to theprovisions of:

(i) The Companies Act, 2013 (the ‘Act’) and the rules madethereunder;

(ii) The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) andthe rules made thereunder;

(iii) The Depositories Act, 1996 and the Regulations and Bye-lawsframed thereunder;

(iv) Foreign Exchange Management Act, 1999 and the rules andregulations made thereunder to the extent of Foreign DirectInvestment, Overseas Direct Investment and ExternalCommercial Borrowings;

(v) The following Regulations and Guidelines prescribed under theSecurities and Exchange Board of India Act, 1992 (‘SEBI Act’):

(a) The Securities and Exchange Board of India (SubstantialAcquisition of Shares and Takeovers) Regulations, 2011;

(b) The Securities and Exchange Board of India (Prohibitionof Insider Trading) Regulations, 2015;

(c) The Securities and Exchange Board of India (Issue ofCapital and Disclosure Requirements) Regulations, 2009

Annexure-2FORM NO. MR-3

SECRETARIAL AUDIT REPORTFOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2020

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies(Appointment and Remuneration Personnel) Rules, 2014]

(Not applicable to the Company during the AuditPeriod);

(d) The Securities and Exchange Board of India (Share BasedEmployee Benefits) Regulation, 2014 (Not applicable tothe Company during the Audit Period);

(e) The Securities and Exchange Board of India (Issue andListing of Debt Securities) Regulations, 2008 (Notapplicable to the Company during the Audit Period);

(f) The Securities and Exchange Board of India (Registrarsto an Issue and Share Transfer Agents) Regulations,1993 regarding the Companies Act and dealing withclient;

(g) The Securities and Exchange Board of India (Delisting ofEquity Shares) Regulations, 2009 (Not applicable to theCompany during the Audit Period);

(h) The Securities and Exchange Board of India (Buy back ofSecurities) Regulations, 1998 (Not applicable to theCompany during the Audit Period); and

(i) The Securities and Exchange Board of India (ListingObligations and Disclosure Requirements) Regulations,2015.

(vi) We further report that, having regard to the compliancesystem prevailing in the Company and on examination of therelevant documents and records in pursuance thereof theCompany has complied with the laws applicable specifically tothe Company.

We have also examined compliance with the applicable clauses ofthe Secretarial Standards issued by the Institute of CompanySecretaries of India (Secretarial Standards with respect to Meetingof the Board of Directors (SS-1) and General Meeting (SS-2) issuedby the Institute of Company Secretaries of India.

During the audit period under review, the Company has compliedwith the provisions of the Act, Rules, Regulations, Guidelines,Standards etc. mentioned above and other applicable Acts.

We further report that, based on the information provided and therepresentation made by the Company and also on the review ofthe internal compliance reports taken on record by the Board ofDirectors of the Company, in our opinion, adequate systems andprocesses exist in the Company to monitor and ensure compliancewith provisions of applicable industry specific Acts, general lawslike Labour laws and environmental laws etc.

During the audit period, there were no major events which hadbearing on the Company’s affairs in pursuance of the above referredlaws, rules, regulations, guidelines etc.

We further report that, the compliance by the Company ofapplicable financial laws like direct and indirect tax laws and

Statutory Reports


16

maintenance of financial records and books of accounts has notbeen reviewed in this Audit since the same have been subject toreview by statutory financial audit and other designatedprofessionals.

We further report that

The Board of Directors of the Company is duly constituted withproper balance of Executive Directors, Non-Executive Directors,Independent Directors and Women Director. There was no changein the composition of the Board during the financial year underreview.

Adequate notice is given to all directors to schedule the BoardMeetings, agenda and detailed notes on agenda were sent inadvance, and a system exists for seeking and obtaining furtherinformation and clarifications on the agenda items before themeeting and for meaningful participation at the meeting.

All decisions at Board Meetings and Committee Meetings are

carried out unanimously as recorded in the minutes of the meetingsof the Board of Directors or Committee of the Board as the casemay be.

We further report that there are adequate systems and processesin the Company to commensurate with the size and operations ofthe Company to monitor and ensure compliance with applicablelaws, rules, regulations and guidelines.

For Saqib & AssociatesCompanies Secretaries

Sd/-Mohd Saqib

ProprietorDate: August 24, 2020 ACS: 48433; CP No.: 18116Place: New Delhi UDIN: A048433B000606925


Conservation of energy, Technology Absorption and ForeignExchange Earning and Outgo,

The information under section 134(3) (m) of the Companies Act,2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014for the year ended March 31, 2020 is given below and forms partof the Directors’ report.

A. CONSERVATION OF ENERGY

i. Stepping towards company’s commitment for energyconservation, various steps have been taken in this regard byadopting latest technology, up gradation of existing systemsand by system modifications. The highlights of these stepsare as under:

• Implementation of various recommendations made duringthe detailed Power and Water Kaigen to optimize the useof available energy resources.

• Installation of VFD on all ID fans of Boiler No-4.

• Installation of VFD on all Air Handling Unit at MMF Plants.

• Installation of VFD on Booster Pump at ETP.

• Utilizing LP steam instead of HP in MMF-1 & 4 mixingsection.

• Waste heat recovery at Ejectors of MMF Plant No-1 &4by installing heat exchanger.

• Replacement of faulty steam traps in oven sections toprevent excess bleeding of steam and to improvecollection of steam condensate.

• Replacement of old inefficient motors with new energyefficient motors of class IE-3 in MMF Plants.

• Use of LED lights for street lighting.

• Replacement of old conventional fluorescent/GLS lightswith LED fittings at residential colony.

• Use of 100 LED Lights for New Spray Dryer Plant.

ii. In line with Company’s efforts towards utilizing alternativesource of energy, the Company enhanced its self generationfrom Biomass (Rice husk,wooden chips etc.) to reduce loadon state power utility which is generating power from fossilfuels (Coal).

iii. The Capital investment on energy conservation equipment is` 65 Lacs.

B. TECHNOLOGY ABSORPTION.

i. The Efforts made by the Company towards technologyabsorption, during the year are as under :

• Installation of Automatic Bio-metric door locks at MMFPlants to restrict the entry of unauthorized persons.

• Installation of U conveyor for Boiler No- 4 Ash conveying.

• Installation of level sensor for tail tank of MMF Plant No-2&3 to control the level of the tank to avoid waterwastages.

• Installation of level sensor for soaking pit of 66 KVSubstation for auto drainage of raining water.

• Replacement of Roto pumps with SS hygiene twin screwpumps at MMF plants oven halls as good manufacturingpractice.

• Installation of online monitoring system in distillery divisionas a compliance of excise department guidelines.

• Use of a control loop for controlling the level in Hopers.

• Installation of controller for the automation of turbineloading as per grid load variation.

ii. In case of imported technology (imported during the last threeyears reckoned from the beginning of the financial year ) - NA

iii. The expenditure incurred on research and development.

No capital investment was made for R&D during the year underreview.

C. Foreign Earnings & Outgo (`̀̀̀̀ In Lacs)

S. Particulars As at As atNo. March 31, 2020 March 31, 2019

1 Earnings in 476 462foreign currency

2 Expenditure in 855 983Foreign Currency

Annexure-3

Statutory Reports


18

In accordance with Regulation 34 read with Schedule V of theSecurities and Exchange Board of India (Listing Obligations andDisclosure Requirements) Regulations, 2015 [“SEBI (LODR)Regulations”], the report containing the details of CorporateGovernance of Jagatjit Industries Limited (“the Company”/ “JIL”)is as follows:

1. Company’s Philosophy on Corporate Governance

Corporate Governance is about ensuring transparency,disclosure and reporting that conforms fully to the existinglaws of the Country and to promote ethical conduct of businessthroughout the organization. The philosophy of the Companyin relation to corporate governance is to ensure transparencyin all its operations, make disclosures and enhanceshareholders’ value without compromising on compliance withthe laws and regulations.

Your Company is committed to sound principles of CorporateGovernance with respect to all its procedures, policies andpractices. Under good Corporate Governance, we arecommitted to ensure that all functions of the Company aredischarged in a professionally sound, accountable andcompetent manner.

The Board of Directors of the Company fully supports corporategovernance practices and actively participates in overseeingrisks and strategic management. The organization viewsCorporate Governance in its widest sense almost like atrusteeship, a progressive philosophy and ideology ingrained

in the corporate culture. The governance processes andsystems of your Company have strengthened over a period oftime resulting in constant improvisation of sustainable growth.

2. Board of Directors

The Board of Directors of your Company has an optimumcombination of executive, non-executive and women directorswith more than fifty percent of the Board of Directorscomprising of non-executive directors.

The Board as on March 31, 2020 comprises of six Directorsconsisting of one executive and five non-executive Directorsincluding three independent directors.

The members of the Board are drawn from various fieldshaving considerable expertise in their respective areas.Together they bring diverse experience, varied perspectivesand complementary skills and vast expertise.

All the Independent Directors have declared that they meetthe criteria of ‘Independence’ mentioned under Regulation 16(b) of SEBI (LODR) Regulations and Section 149 of theCompanies Act, 2013 (“Act”) including any amendmentthereof.

The Details of Board of Directors (composition and category),attendance of each director at the meeting of the Board heldduring the Financial Year 2019-20 and at the last AnnualGeneral Meeting (AGM); and also their other Directorshipsand Committee Memberships / Chairpersonship are givenbelow :

Annexure – 4CORPORATE GOVERNANCE REPORT

Board Meetings:

The Board of Directors held six Board Meetings during theperiod under review i.e. on May 30, 2019, July 15, 2019,

August 14, 2019, October 21, 2019, November 14, 2019and February 14, 2020.

Inter-se relationship among Directors

None of the Directors has any inter-se relationship.

Name of the Director Category No. of Board No. of Board No. of other Committee AttendanceMeetings held Meetings Directorships Membership / in Last AGM

during the attended held as on Chairmanship intenure March 31, other Companies as

2020* on March 31, 2020

Mr. Ravi Manchanda Executive 6 6 8 - Yes

Mrs. Kiran Kapur Non-Executive 6 4 - - NoIndependent

Mrs. Anjali Varma Non-Executive 6 6 2 - NoNon-independent

Ms. Sonya Jaiswal Non-Executive 6 4 1 - YesIndependent

Mrs. Sushma Sagar Non-Executive 6 4 - - NoNon-Independent

Mrs. Asha Saxena Non-Executive 6 6 1 - NoIndependent

*All other directorships are in unlisted entities.


Details of shareholding of Non-Executive Directors

Sr. Name of Director No. of Equity shares heldNo. as on March 31, 2020

1. Mrs. Kiran Kapur 100

2. Mrs. Anjali Varma 100

3. Ms. Sonya Jaiswal 3586

4. Mrs. Asha Saxena -

5. Mrs. Sushma Sagar 1300

Directors’ Induction and Familiarization

The provision of an appropriate induction programme for newDirectors and ongoing training for existing Directors is a majorcontributor to the maintenance of high Corporate Governancestandards of the Company. The Managing Director and theCompany Secretary are jointly responsible for ensuring suchinduction and such training programmes are provided to theDirectors on need basis. The management provides suchinformation and training either at the meeting of Board ofDirectors or otherwise. The details of such familiarizationprogrammes for Independent Directors are posted on thewebsite and can be accessed at www.jagatjit.com.

Selection of Independent Directors

Considering the requirement of skill sets on the Board, eminentpeople having an independent standing in their respective field/ profession, and who can effectively contribute to theCompany’s business and policy decisions are considered bythe Nomination and Remuneration Committee, forappointment, as Independent Directors on the Board. TheCommittee, inter alia, considers qualification, positiveattributes, area of expertise and number of directorships andmemberships held in various committees of other companiesby such persons in accordance with the Company’s Policy forselection of Directors and determining Directors’independence. The Board considers the Committee’srecommendation and takes appropriate decision. EveryIndependent Director, at the first meeting of the Board in whichhe/she participates as a Director and thereafter at the firstmeeting of the Board in every Financial Year, gives a declarationthat he / she meets the criteria of independence as providedunder law.

Your Company has also issued formal appointment letters toall the Independent Directors in the manner provided underthe Act. Terms and Conditions for appointment of IndependentDirectors are available on the website of the Company andcan be accessed at www.jagatjit.com.

The Independent Directors are appointed for a period of fiveyears which is well within the maximum tenure of IndependentDirectors provided under the Act and clarifications/ circularsissued by the Ministry of Corporate Affairs, in this regard, fromtime to time.

Brief Profile of Director(s) being appointed at the ensuingAnnual General Meeting (AGM):

Brief profile of Director being appointed at the ensuing AGM

forms part of the Notice calling the 75th (Seventy Fifth) AGMand the same are not being repeated for the sake of brevity.

Skills/ Expertise/ competence of the Board of Directorsincluding the areas as identified by the Board in the Contextof the Company’s Business

The Company is mainly engaged in the manufacture of IndianMade Foreign Liquor (IMFL) with the individual Members of itsBoard of Directors bringing in knowledge and experience froma variety of sectors, demonstrating breadth and depth ofmanagement and leadership experience in the followingcompetence areas:

• Financial and business acumen;

• Guiding and setting the pace for Company’s operationsand future development by aiding implementation of bestsystems and processes;

• Building effective sales & marketing strategies, corporatebranding and advertising functions;

• Overseeing the development and implementation of RiskManagement/ GRC tools;

• Management and strategy of the Information Technologyfunction;

• Human Resources Management

Board Evaluation

The process of Board Evaluation has been mentioned in theBoard’s Report and the same is not being repeated for thesake of brevity.

Internal Audits and Compliance management

Messrs Mittal Chaudhry & Co., Chartered Accountant(Registration No. 002336N) were appointed as InternalAuditors of the Company for the financial year 2018-19. TheBoard of Directors at their meeting held on 14th November,2019 have re-appointed him as Internal Auditors for carryingout the internal audit for the financial year 2019-20, who willalso Audit and review the internal controls and operatingsystems and procedures of the Company. The report onfindings of Internal Auditors is submitted to the AuditCommittee periodically.

Separate Meeting of the Independent Directors:

In terms of the provisions of Schedule IV of the Act read withregulation 25 of SEBI (LODR) Regulations, the IndependentDirectors are required to meet at least once in a year withoutthe presence of Executive Directors and Managementrepresentatives.

During the Financial Year 2019-20 the Independent Directorsmet on February 20, 2020 and inter alia discussed:

• The performance of non-Independent Directors and theBoard as a whole

• The quality, quantity and timeliness of flow of informationbetween the Company management and the Board thatis necessary for the Board to effectively and reasonablyperform their duties.

Statutory Reports


20

In addition to formal meetings, interactions outside the BoardMeetings also take place between the Managing Director andthe Independent Directors.

3. Audit Committee

As on March 31, 2020 the Audit Committee comprised ofMrs. Kiran Kapur, Mr. Ravi Manchanda, Ms. Sonya Jaiswaland Mrs. Asha Saxena. Ms. Sonya Jaiswal is the Chairpersonof the Audit Committee.

The terms of reference of this Committee cover the mattersspecified for Audit Committee under Section 177 of theCompanies Act, 2013 and Regulation 18 of the SEBI (LODR)Regulations.

During the year under review the Audit Committee held fourmeetings i.e on May 30, 2019, August 14, 2019, November14, 2019 and February 14, 2020.

Attendance record of Audit Committee members

Sr. Name of Members No. of meetings MeetingsNo. held during the attended

Financial Year2019-20

1 Mrs. Kiran Kapur 4 3

2 Mr. Ravi Manchanda 4 4

3 Ms. Sonya Jaiswal 4 4

4 Mrs. Asha Saxena 4 4

4. Nomination and Remuneration Committee

The Nomination and Remuneration Committee comprises ofMrs. Kiran Kapur, Mrs. Anjali Varma and Ms. Sonya Jaiswal.Mrs. Kiran Kapur is the Chairperson of the Nomination andRemuneration Committee.

The functions and terms of reference of the Committee areas prescribed under Section 178 of the Act and Regulation19 of the SEBI (LODR) Regulations. The Committee identifiesthe persons, who are qualified to become Directors of theCompany / who may be appointed in Senior Management inaccordance with the criteria laid down, recommend to theBoard their appointment and removal and shall also specifythe manner for effective evaluation of performance of Board,its committees and individual directors to be carried out eitherby the Board, by the Nomination and Remuneration Committeeor by an independent external agency and reviews itsimplementation and compliance. The Committee alsoformulates the criteria for determining qualifications, positiveattributes, independence of the Directors and recommend tothe Board a Policy, relating to the remuneration for theDirectors, Key Managerial Personnel and other employees.

Remuneration policy of the Company is such as to retain theemployees on long term basis and is comparable with otherindustries in the region.

During the year under review, the Nomination andRemuneration Committee held two meetings i.e. on July 15,2019 and October 21, 2019.

Attendance record of Nomination and RemunerationCommittee members



1 Mrs. Kiran Kapur 2 2

2 Mrs. Anjali Varma 2 2

3 Ms. Sonya Jaiswal 2 2

Performance evaluation criteria for Independent Directors

The Nomination and Remuneration Policy of the Company laysdown the criteria for Directors’/Key Managerial Personnels’appointment and remuneration including criteria fordetermining qualification, positive attributes, independence ofDirectors, criteria for performance evaluation of Executive andNon-Executive Directors (including Independent Directors) andother matters as prescribed under the provisions of the Actand the SEBI (LODR) Regulations as well as the performanceevaluation criteria for Independent Directors is determinedby the Nomination and Remuneration Committee. An indicativelist of factors that may be evaluated include participation andcontribution by a Director, commitment, effective deploymentof knowledge and expertise, effective management ofrelationship with stakeholders, integrity and maintenance ofconfidentiality and independence of behavior and judgment.

5. Remuneration of Directors

Payment to Non-Executive Directors including all pecuniaryrelationship or transactions of Non-Executive Directors

The non-executive directors are not paid any remunerationother than sitting fees for attending Board and CommitteeMeetings. The details of sitting fee paid during the year are asfollows:

Sl. Name of the Directors Total SittingNo. Fees Paid (`̀̀̀̀)

1. Mrs. Kiran Kapur 2,20,000

2. Mrs. Anjali Varma 160,000

3. Ms. Sonya Jaiswal 2,80,000

4. Mrs. Asha Saxena 2,20,000

5. Mrs. Sushma Sagar 80,000

There has been no pecuniary relationship or transactions ofthe Non-Executive Directors vis-à-vis the Company during theyear except the sitting fees paid to them as detailed above.

Payment to Executive Director

During the period under review, Mr. Ravi Manchanda,Managing Director was paid remuneration as under :

Sr. Name of Salary ( `̀̀̀̀) *Perquisites Total (`̀̀̀̀)No. the Director & others (`̀̀̀̀)

1 Mr. Ravi 21,00,000 15,36,907 36,36,907Manchanda

* includes contribution to Funds and other allowances


Service contract, severance fee and notice period of theExecutive Director:

The appointment of the Managing Director is governed byResolution passed by the Shareholders of the Company, whichcovers the terms and conditions of such appointment, readwith the service rules of the Company. No notice period orseverance fee is payable to any Director.

6. Stakeholders’ Relationship Committee

The Stakeholders’ Relationship Committee comprises of Mrs.Kiran Kapur, Mr. Ravi Manchanda and Ms. Sonya Jaiswal,Independent Director is the Chairperson of the Stakeholders’Relationship Committee. Company Secretary is the ComplianceOfficer of the Committee.

The functioning and terms of reference of the Committee areas prescribed under Section 178 of the Act and Regulation20 of the SEBI (LODR) Regulations. The Committee focusesprimarily on monitoring expeditious redressal of investors’ /stakeholders’ grievances and also functions in an efficientmanner that all issues / concerns of the stakeholders areaddressed / resolved promptly.

The Company has not received any complaint fromshareholders during the Financial Year ended March 31,2020.

No transfer was pending on March 31, 2020 for more than15 days of its receipt.

During the year under review the Stakeholders’ RelationshipCommittee held one meeting on February 14, 2020.

Attendance record of Stakeholders’ RelationshipCommittee members



1. Mrs. Kiran Kapur 1 1

2. Mr. Ravi Manchanda 1 1

3. Ms. Sonya Jaiswal 1 1

Prohibition of Insider Trading

With a view to regulate trading in securities by the Directorsand designated employees on the basis of Unpublished PriceSensitive Information available to them by virtue of their positionin the Company, the Company has adopted a Code of Conductfor Prohibition of Insider Trading as per SEBI (Prohibition ofInsider Trading) Regulations, 2015. The Company has alsoadopted a Code of Practices and Procedures for FairDisclosure of Unpublished Price Sensitive Information foradhering to the principles of Fair Disclosure as per the SEBI(Prohibition of Insider Trading) Regulations, 2015, which isavailable at the website of the Company and can be accessedat www.jagatjit.com.

7. General Body Meetings

The last three AGMs of the Company were held at theRegistered Office of the Company at Jagatjit Nagar, Distt.Kapurthala -144802, Punjab at the following dates and times,wherein the following special resolutions were passed:

Sr. Year Date Day Time Brief Description of Special Resolutions passedNo.

1. 2017 September 27, 2017 Wednesday 09.30 a.m. - appointment and payment of remuneration to Ms. RoshiniSanah Jaiswal as Director of the Company

- appointment and payment of remuneration to Mr. RaviManchanda as Managing Director of the Company

2. 2018 December 27, 2018 Thursday 09.30 a.m. - borrowing in excess of the limit(s) specified under section180(1)(c) of the Companies Act, 2013

- approval of limit(s) under section 180(1)(a) of the CompaniesAct, 2013

3. 2019 September 30, 2019 Monday 09.30 a. m. - To re-appoint Mr. Ravi Manchanda (DIN.00152760) asManaging Director of the Company for a further period of twoyears.

- To re-appoint Mrs. Kiran Kapur (DIN. 02491308) as anIndependent Director for a further term of five years.

Extraordinary General Meeting(s)

Apart from the AGM, no other General Meeting was held duringthe Financial Year 2019-20.

Postal Ballot

During the year 2019-20, no resolution was passed throughpostal ballot.

No Resolution requiring Postal Ballot as required by theCompanies (Passing of Resolution by Postal Ballot) Rules,

2011, has been placed for Shareholders’ approval at thisAnnual General Meeting.

Further, Resolutions, if required, shall be passed by PostalBallot as per the prescribed procedure under the Act and SEBI(LODR) Regulations.

8. Means of Communication

The Quarterly and Annual Financial Results of the Companyare submitted to the Stock Exchange and are published in thenewspapers as required under the SEBI (LODR) Regulations.

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22

The results are also displayed on the website of the Companywww.jagatjit.com under the heading “Investors”. The same arealso forwarded to the Shareholders on their request.

9. General Shareholders Information

a) Annual General Meeting

Date : December 31, 2020

Time : 10:30 a.m.

Venue : The next Annual GeneralMeeting shall be held as perthe advisories issued by theMinistry of Corporate Affairsand Securities and ExchangeBoard of India through VideoConferencing/other AudioVisual Means as per notice ofAGM.

Annual Book Closure : Saturday, December 26,2020 to Thursday,December 31, 2020(both days inclusive)

b) Financial Year : April 1, 2019 toMarch 31, 2020

c) Financial Calendar (2020-21) (tentative)

(i) First Quarter Results : Mid of September, 2020

(ii) Second Quarter : Mid of November, 2020Results

(iii) Third Quarter Results : Mid of February, 2021

(iv) Annual Results for : By May 30, 2021the year endingMarch 31, 2021

d) Dividend Payment Date

The Board of Directors has not recommended any dividendfor the year under review.

e) Listing on Stock Exchange

Sr. Name and Address Stock codeNo. of the Stock Exchange

1 BSE Limited, 5071551st Floor, New Trading Ring,Rotunda Building, P J Towers,Dalal Street, Fort, Mumbai-400 001

The Annual Listing Fees for the Financial Year 2020-21 havebeen paid to the BSE Limited.

f) Stock Market Data for the period April 01, 2019 to March31, 2020 at the BSE Limited

The monthly high and low share prices of the Company in Rs.and the Sensex during the last financial year at the BSE are asfollows :

Month High Low Sensex High Sensex Low

April, 2019 43.30 38.00 39,487.45 38,460.25

May, 2019 42.45 37.20 40,124.96 36,956.10

June, 2019 46.30 34.10 40,312.07 38,870.96

July, 2019 37.75 28.50 40,032.41 37,128.26

August, 2019 29.05 23.05 37,807.55 36,102.35

September, 2019 33.60 23.00 39,441.12 35,987.80

October, 2019 35.85 28.80 40,392.22 37,415.83

November, 2019 34.00 26.05 41,163.79 40,014.23

December, 2019 30.70 22.50 41,809.96 40,135.37

January, 2020 30.85 24.00 42,273.87 40,476.55

February, 2020 29.65 24.75 41,709.30 38,219.97

March, 2020 29.45 18.90 39,083.17 25,638.90

g) Registrar and Transfer Agent

In line with the guidelines of the Securities and Exchange Boardof India and to provide better services to its shareholders, theCompany is doing all the share registry related work in-house.

h) Share Transfer System

The Securities and Exchange Board of India (SEBI) hasamended Regulation 40 of SEBI (Listing Obligations and

Disclosure Requirements) Regulations, 2015 mandating thattransfer of securities would not be processed unless thesecurities are held in the dematerialized form with a depositorywith effect from 1st April 1, 2019, other than transpositionand transmission of shares.

Any investor who is desirous of transferring shares (whichare held in physical form) can do so only after the shares aredematerialized.


k) Outstanding GDRs.

The Company has issued 12,60,500 GDRs in overseas marketrepresenting 2,52,10,000 underlying equity shares. GDRshave not been converted into equity shares. GDRs do not carryvoting rights.

l) Dematerialisation of Shares and Liquidity.

The shares of the Company are in compulsory demat segmentand are available for trading in the depository systems of boththe National Securities Depository Limited (NSDL) and CentralDepository Services (India) Limited (CDSL). As on March 31,2020, 1,67,60,673 equity shares being 36.32 % of the totalpaid-up Capital have been dematerialised.

m) Plants Location

The Company has following plants:

Sr. LocationNo.

1. Jagatjit Nagar, Distt. Kapurthala – 144 802, Punjab

2. Plot No. SP 1-3, Sotanala, RIICO Industrial Area, Behror,Distt. Alwar -301 701, Rajasthan

n) Commodity price risk or foreign exchange risk and hedgingrisk.

The details for the same have been provided in the Notes toFinancial Statements of the Company for the Financial Year2019-20.

o) Address for Correspondence

Registered Office : Jagatjit Industries LimitedJagatjit Nagar,Distt. Kapurthala -144 802, PunjabTel: 0181- 2783112-16Fax: 0181-2783118E.mail: [email protected]

Corporate office : Jagatjit Industries Limited4th Floor, Bhandari House,91, Nehru Place,New Delhi-110 019.Tel: 011- 26432641-42Fax: 011-26441850E.mail: [email protected]

Investor E-mail address : [email protected]

p) Credit Rating [to be added in terms of Schedule V (C) (9) (q) ofLODR]

10. Other Disclosures

(i) Related Party Transactions: Please refer the Board’sReport for details on Related Party Transactions andMaterially Significant Related Party Transactions that mayhave potential conflict with the interests of Company atlarge, during the year ended March 31, 2020.

(ii) There has not been any non-compliance, penalty orstricture imposed on the Company by any Stock Exchange

i) Distribution of Shareholding as on March 31, 2020

Category (in `̀̀̀̀) No. of % of Share No. of % ofShareholders Holders Shares held Shareholding

Upto - 5000 2706 77.89 348285 0.75

5001 - 10000 309 8.89 223746 0.48

10001 - 20000 181 5.21 269898 0.58

20001 - 30000 74 2.13 186701 0.40

30001 - 40000 45 1.30 155314 0.34

40001 - 50000 35 1.01 166451 0.36

50001 - 100000 66 1.90 456432 0.99

Above - 100000 58 1.67 44341285 96.08

Total 3474 100.00 46148112 100.00

j) Shareholding pattern as on March 31, 2020

Sr. Category No. of % of total % of VotingNo. Shares held shareholding Rights

1. Promoters’ Holding 1,56,45,365 33.90 92.27

2. Mutual Funds & UTI 1300 0.00 0.00

3. Banks, Financial Institutions, Govt. Companies 1772 0.00 0.00

4. Private Corporate Bodies 1495646 3.24 2.19

5. NRIs/FIIs (other than Promoters) 249984 0.54 0.36

6. Indian Public 3544045 7.68 5.18

Total 2,09,38,112 45.37 100.00

7. GDRs (Underlying Shares) 2,52,10,000 54.63 -

Grand Total 4,61,48,112 100.00 100.00

The Company does not have any share lying in the demat suspense account or unclaimed suspense account.

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24

or SEBI or any statutory authority on any matter relatedto capital markets, during the last three years.

(iii) There had been delay in submission and publication ofFinancial Results for the quarters and years ended March31, 2017. The BSE Limited levied a penalty which hasbeen paid by the Company.

(iv) Whistle Blower Policy: In compliance with Section 177 ofthe Act and the SEBI (LODR) Regulations, the Companyhas formulated a Whistle Blower Policy for employeeswhich has been uploaded on the website of the Companyat www.jagatjit.com.

Under the Vigil Mechanism Policy, the protecteddisclosures can be made by a victim through an e-mail ora letter to the Vigilance Officer or to the Chairperson ofthe Audit Committee.

The Policy provides for adequate safeguards againstvictimization of employees and directors who avail of thevigil mechanism and also provides for direct access tothe Vigilance Officer or the Chairperson of the AuditCommittee, in exceptional cases. No personnel of theCompany has been denied access to the Audit Committee.The main objective of this policy is to provide a platformto Directors and employees to raise concerns regardingany irregularity, misconduct or unethical matters /dealings within the Company which have a negativebearing on the organization either financially or otherwise.

This policy provides an additional channel to the normalmanagement hierarchy for employees to raise concernsabout any such breaches of the Company’s Values orinstances of Company’s Code of Conduct violations.Therefore, it is in line with the Company’s commitmentto open communication and to highlight any such matterswhich may not be getting addressed in a proper manner.During the year under Report, no Complaint was received.

(v) Policy for Determination of Material Subsidiary can beaccessed at www.jagatjit.com.

(vi) Policy on Related Party Transactions can be accessed atwww.jagatjit.com.

(vii) The Company has followed all the mandatoryrequirements prescribed under SEBI (LODR) Regulations.

(viii) On the basis of written representations/ declarationreceived from the directors, as on March 31, 2020,

M/s Saqib & Associates, Company Secretaries inpractice, have issued a certificate, confirming that noneof the Directors on Board of the Company has beendebarred or disqualified from being appointed orcontinuing as Director of companies by SEBI/ MCA orany such authority.

11. Disclosure of Compliance with Corporate GovernanceRequirements specified in Regulation 17 to 27 andRegulation 46 of SEBI (LODR) Regulations

The Company has complied with the applicable provisions ofSEBI (LODR) Regulations including Regulation 17 to 27 andRegulation 46 of SEBI (LODR) Regulations.

The Company submits a quarterly compliance report oncorporate governance signed by Compliance Officer to theStock Exchange within 15 (fifteen) days from the close of everyquarter. Such quarterly compliance reports on corporategovernance are also posted on the Company’s website.

Compliance of the Conditions of Corporate Governance hasalso been audited by a firm of Practicing Company Secretaries.After being satisfied of the above compliances, they have issueda compliance certificate in this respect.

12. Code of Conduct

The Board of Directors has adopted a Code of Conduct forDirectors and Senior Management of the Company. An annualaffirmation of compliance with the Code of Conduct is takenfrom all the Directors and Senior Management members ofthe Company to whom the Code applies. The Code of Conducthas also been posted at the website of the Companywww.jagatjit.com. Managing Director’s affirmation that theCode of Conduct has been complied with by the Board ofDirectors and Senior Management is produced elsewhere inthe report.

For and on behalf of the BoardFor Jagatjit Industries Limited

Ravi Manchanda Sushma SagarManaging Director Director(DIN.00152760) (DIN. 02582144)

Date: September 03, 2020Place: New Delhi

Declaration as required under SEBI(Listing Obligations and Disclosure Requirements) Regulations, 2015

I, Ravi Manchanda, Managing Director hereby declare that as per the requirements of the SEBI (Listing Obligations and DisclosureRequirements) Regulations, 2015, the Code of Conduct adopted by the Company for its Board and Senior Management Personnel hasbeen duly complied by all the Board Members and Senior Management Personnel of the Company during the year under review.

Sd/-Ravi Manchanda

Date: September, 03, 2020 Managing DirectorPlace: New Delhi DIN. 00152760


Annexure – 5

CERTIFICATE ON COMPLIANCE OF CONDITIONS OF CORPORATE GOVERNANCE

To,The Members,JAGATJIT INDUSTRIES LIMITEDJagatjit Nagar, Dist. Kapurthala - 144 802Punjab

1. We have examined the compliance of conditions of Corporate Governance by JAGATJIT INDUSTRIES LIMITED (“the Company”), forthe year ended on March 31, 2020, as stipulated in Regulations 17 to 27 and clauses (b) to (i) of regulation 46 (2) and paragraphsC, D and E of Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”).

2. The compliance of conditions of Corporate Governance is the responsibility of the Management. Our examination was limited to areview of the procedures and implementation thereof, adopted by the Company for ensuring the compliance of the conditions ofCorporate Governance. It is neither an audit nor an expression of opinion on the financial statements of the Company.

3. In our opinion and to the best of our information and according to our examination of the relevant records and the explanations givento us and the representations made by the Directors and the Management, we certify that the Company has complied with theconditions of Corporate Governance as stipulated in the Regulations 17 to 27 and clauses (b) to (i) of regulation 46(2) and paragraphsC, D and E of Schedule V of the SEBI Listing Regulations for the year ended March 31, 2020.

4. We further state that such compliance is neither an assurance as to the future viability of the Company nor of the efficiency oreffectiveness with which the management has conducted the affairs of the Company.

For Saqib & AssociatesCompany Secretaries

Sd/-Mohd Saqib

ProprietorDate: August 24, 2020 ACS : 48433; CP No. 18116Place: New Delhi UDIN: A048433B000631499

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Economic Overview

The Covid-19 pandemic is inflicting high and rising human costsworldwide, and the necessary protection measures are severelyimpacting economic activity. Global growth is projected at –4.9percent in 2020, 1.9 percentage points below the April 2020World Economic Outlook (WEO) forecast. The Covid-19 pandemichas had a more negative impact on activity in the first half of 2020than anticipated, and the recovery is projected to be more gradualthan previously forecast. In 2021 global growth is projected at 5.4percent. Overall, this would leave 2021 GDP some 6.5 percentagepoints lower than in the pre-Covid-19 projections of January 2020.The adverse impact on low-income households is particularly acute,imperilling the significant progress made in reducing extremepoverty in the world since the 1990s. [Source: https://www.imf.org/en/Publications/WEO]

India’s GDP growth moderated to 4.8 percent in H1 of 2019-20,amidst a weak environment for global manufacturing, trade anddemand. In 2019-20, fiscal deficit was budgeted at ` 7.04 lakhcrore (3.3 percent of GDP), as compared to ` 6.49 lakh crore (3.4per cent of GDP) in 2018-19. Inflation increased from 3.3 per centin H1 of 2019-20 to 7.35 per cent in December 2019-20 due totemporary increase in food inflation. [Source: https://www.ibef.org/economy/economic-survey-2019-20]

In wake of Covid-19, several leading agencies have projected a sharpdip in India’s GDP growth. World Bank puts India’s GDP growthforecast in the range of 1.5-2.8%; IMF has projected a growthforecast of 1.9% for FY 2020 followed by a quick turnaround andgrowth of 7.4% in FY 2021 on a distorted base of fiscal 2020.Oxford Economics expects India’s GDP for calendar year 2020 tocontract by 1% followed by quick spur in 2021 of 8.9% on thecontracted base.

Industry Overview

India is one of the fastest growing alcohol markets in the world.Alcohol consumption in India amounted to about 5.4 billion liters in2016 and was estimated to reach about 6.5 billion liters by 2020.The steady increase in consuming these beverages can beattributed to multiple factors including the rising levels of disposableincome and a growing urban population among others. Althoughthe average per adult intake of alcohol was considerably low in Indiawhen compared to other countries such as the United States, heavydrinkers among young Indians were more prevalent. This providestremendous opportunity to drive growth of alcobev industry on theback of its rising working-age population. It is expected that percapita consumption will increase with changes in life style andaspiration of the population.

Due to Covid-19 pandemic, it is difficult to provide an industryoutlook, given the context that this is a constantly evolving and stillunfolding situation. To comment on anything about demandnormalization and revival is a little premature for the time being.That being said, the industry should be completely prepared for aremarkably challenging external environment for the foreseeable

future. Once the world overcomes from the prevailing situations,future growth in the liquor industry in India will be mirrored bycontinued consumer trend towards premiumisation, motivated byrising affluence, globalised outlook, urbanisation, progressivelifestyles.

Business Overview

Jagatjit Industries Limited (the Company or Jagatjit) was set up in1944 in Punjab. Its business units comprise of Indian Made ForeignLiquor (IMFL), Country Liquor (CL), Malted Milk Food (MMF) & MaltExtract (MEX), and Real Estate. The Company has a rich IMFLportfolio including Whiskies (Scotch and Blended Indian whiskys),Gin, Rum, Brandy and Vodka. In India, the Company has a strongpresence in the Northern region, and also in the States of AndhraPradesh, Telangana, Odisha and Meghalaya. Internationally, itsproducts are available in Guinea, Ghana, Togo, Burkina Faso, Angola,Cameroon, Sierra Leone, Liberia, Ivory Coast, the UAE, Oman, Kenyaand Uganda.

In view to meet the requirements of hand sanitizers due to increaseddemand of the same on account of spread of Covid-19, the Companyhas introduced Hand Sanitizers during the year 2020 andaccordingly entered into arrangement(s) with various parties formanufacture/procurement of Hand Sanitizers for sales/distribution against supply of Denatured Alcohol by the Company.The product of the Company appears to be well accepted in themarket as per initial reports.

Operational Overview

A) Liquor

The Company’s primary focus of business is in manufacturing,distributing and selling IMFL brands with intent to providesuperior brands at affordable prices. During FY 2019-20, theCompany sold 2.16 million IMFL cases. The Company is alsoengaged in manufacturing of country liquor in Punjab, whereit recorded volume of about 0.86 million cases. The Companyhas started focusing on production of Extra Neutral Alcohol(ENA) and it will have positive bearing on the performance ofthe Company in FY 2020-21.

B) Malted Milk Foods and Dairy Products

The Company has a food division with its own malt house, maltextract plant and a malted milk food manufacturing unit. Themalted milk food division (MMF) has four units of tray dryingand one unit of spray drying, with a total manufacturing capacityof 105 MT per day of high-quality malted milk food. Presentlythe Company manufactures around 32000 MT P.A. MaltedMilk Food for Hindustan Unilever Limited under the Brandname of Horlicks and Boost. Capacity expansion for MMF is inprocess in order to increase capacity by 4.88 KT per annumby the end of current year.

The Company’s modern malt house produces malt from thebest barley sourced after strict inspection and quality control

Management Discussion & Analysis


processes from selected farms in Punjab. This malt is utilisedfor its own requirements in both the divisions – malted milkfood and distillery. It makes three malt grades– food, distilleryand brewery grade, all of which are sold in the domestic marketand also exported.

The Company also supplies its Malt Extract/Cereal Extract toHindustan Uniliver Limited.

C) International Brand Portfolio

In the international market, Jagatjit has a full portfolio of bothbrown and white spirits in every price points. Jagatjit hasentered into a long arrangement with a RTM partner in UAEwho has a strong distribution network. Jagatjit plans to bringback the lost glory in the international market with renovatedand fit for purpose packaging. The Company has not onlyinvested in UAE market behind building the brands but alsohas expanded its business portfolio and brought couple of RTMpartners on board in core importing countries of IMFL. Theobjective of the Company is to expand from current presenceof 8 countries globally to at least 15 countries over the 3-5years horizon. The objective of Jagatjit is to gain acorresponding share of volume in the Jagatjit Portfolio overthe next 5 years which would be at least 25% of the domesticvolume.

D) Real Estate

Jagatjit has various real estete properties. Out of these twoproperties, one each in Gurgaon and New Delhi, have beenleased out to earn rental income. Its Gurgaon property,comprising of approximately 2,00,000 Sq. Ft., is spread over4 acres of land. The property at Connaught Palace, New Delhi,comprises two floors of Ashoka Estate of approximately23,000 Sq. Ft area.

Financial Review

During FY 2019-20, Jagatjit’s sale of alcoholic beveragesdecreased by around 24% in terms of volume. Its total income(including income from services and other sources) stood at `273.31 Crores, as compared to ` 303.87 Crores during theprevious year.

Jagatjit’s beverage segment clocked gross revenue of ` 80.17Crores, as compared to ` 87.11 Crores during the previous year.Its food segment clocked revenue of ̀ 134.20 Crores, as comparedto ` 132.31 Crores during the previous year.

Amount (` Crores)FY 19-20 FY 18-19

Total Income 273.31 303.87

Material Consumption 91.47 88.82

Excise Duty 4.61 24.99

Staff Costs 59.94 68.60

Others 135.23 108.30

EBITDA (17.94) 13.16

Finance Cost 42.11 72.59

Depreciation 9.65 10.44

Profit before tax and (69.70) (69.87)exceptional items

Exceptional items 28.68 3.73(Profit on sale of PPE)

Profit Before Tax (41.02) (66.14)

Tax 7.24 (1.42)

Profit After Tax from (48.26) (64.72)continuing operations

Total comprehensive (51.65) (66.27)Profit After Tax

The total raw material cost increased to ` 91.47 Crores, ascompared to ` 88.82 Crores during the previous year. Excise dutydecreased to ̀ 4.61 Crores, as compared to ̀ 24.99 Crores duringthe previous year. Employee costs decreased to ` 59.94 Crores,as compared to ̀ 68.60 Crores during the previous year. At EBITDAlevel, the Company incurred loss of ` 17.94 Crores, as comparedto a profit of ` 13.16 Crores during the previous year.

Jagatjit incurred a loss before taxation of ` 41.02 Crores fromcontinuing operations, as compared to loss before taxation of `66.14 Crores during the previous year. The net loss during theyear was ` 51.65 Crores, as compared to a net loss of ` 66.27Crores during the previous year.

KEY FINANCIAL RATIOS

Particulars 2019-20 2018-19 % Change Remarks

Debtors Turnover Ratio (Days) 69 143 (52) Due to reduction in debtors

Inventory Turnover Ratio (Days) 42 31 35 Due to increase in finished goods inventory

Interest Coverage Ratio 3.92 4.30 (9) Due to reduction in finance cost as compared to last financial year

Current Ratio 0.45 0.65 (30) N.A.

Debt Equity Ratio 11.54 6.06 90 Due to reduction in equity due to net losses

Operating Profit Margin % 4.8 6.8 (30) Due to decrease in earnings before interest and tax

Net Profit Margin % (17.9) (21.7) (18) Due to reduction of net loss during the current year as comparedto previous year.

Return on Net Worth# - - - N.A.

# Return on Net worth has not been calculated as the Equity/ Net worth of the Company is negative.

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Outlook

Jagatjit has a constant endeavour to embrace modernization andto keep up with the changing trends with technological upgradation.The Company has successfully undergone a massive restructuring,encompassing upgradation of technology and enhanced automationto increase efficiencies and revamping of culture and physicaloffices. Going forward, the Company will remain focused onenhancing sales, managing costs, and providing value to itscustomers/ stakeholders. It is committed to return to profitabilityby streamlining its brand portfolio, investing in higher-contributionbrands, widening its geographical reach, developing export markets,cost optimisation and improving operational efficiencies.

The Company also remains committed to drive excellence in theMalted Milk Food contract manufacturing business and is workingto increase throughput in this segment.

Risks & Concerns

Regulatory risk: Jagatjit operates in a sector which is highlyexposed to the risk of changing regulations.

Mitigation measure: Jagatjit closely monitors the regulatoryenvironment and prepares for any foreseeable changes. In addition,its team of expert and experienced professionals allows promptand appropriate modification to meet the changes in regulatoryframework. At all times, the Company ensures strict adherence tolaws and policies.

Raw material risk: Jagatjit runs the risk of issues in availability ofraw materials and fluctuation in raw material prices.

Mitigation measure: The Company’s long-standing relationship withmost suppliers ensures steady availability of raw materials atcompetitive prices. It is also striving to reduce costs by valueengineering in dry and wet goods and by using standardizedpackaging material in the popular and medium segments.

Innovation risk: Innovation is ensuring sustainable growth in amarket where there are restrictions on advertisement of alcohol.

Mitigation measure: The Company is always looking to innovateand renovate to provide high quality products to its customers ataffordable rates.

Economic risk: The performance of the Company is dependent onrobust consumption, led by rising income levels. This in turn isdependent on robust economic growth and cost of inputs and labour& basis of disposal of income.

Mitigation measure: The Indian economy is one of the fastestgrowing economies in the world. The Company believes that Covid-19 pandemic is a temporary phase for the business and after thelock down is over, we shall return to normalcy soon. The Companyis focused on driving agility and responsiveness across the valuechain. Furthermore, the Company is working on how systems andprocesses need to change post Covid-19 in order to retain its

market share. It is poised for sustainable growth in the comingyears. Jagatjit has strong presence in several international markets.An exposure to international markets reduces dependence onIndia’s economic growth. However current economic slowdown dueto Covid-19 could be a dampener in the mitigation.

Internal Controls

Jagatjit’s policies, guidelines and procedures are designed keepingin mind the nature, size and complexity of its business operations.The Company maintains a proper and adequate system of internalcontrols which provides for automatic checks and balances. Itsresilience and focus is driven to a large extent by its strong internalcontrol systems for financial reporting, supported by a strong setof Management Information Systems.

Jagatjit’s internal audits and those by professional firms closelyoversee the business operations and ensure strict adherence topolicies, safeguarding of its assets, and the timely preparation ofreliable financial documents and reports. Any deviations areprompted to the management. Timely and adequate measures areundertaken to ensure undisrupted functioning of the business. TheCompany has invested in implementing an Oracle EBS to furtherstrengthen controls, processes and aid business decision-making.

Human Resources

Our Company firmly believes that its human resources are keyenablers for the growth of the Company and therefore an importantasset. Hence, the success of the company is closely aligned withthe goals of the human resources of the Company. Taking this intoaccount, our Company continued to invest in developing its humancapital and establishing its brand on the market to attract and retainthe best talent. Jagatjit boasts of well-defined HR policies whichensure alignment of personal goals with professional growth. Itshuman capital stands at around 1582 employees, includingpermanent factory workmen. Employee relations during the periodunder review continued to be healthy, cordial and harmonious atall levels and the Company is committed to maintaining goodrelations with the employees

Cautionary statement

Statements in the Management Discussion and Analysis, describingthe Company’s objective, projections, estimates and expectationsmay be forward-looking statements. Actual results may differmaterially from those expressed or implied due to various risksand uncertainties. Important factors that could make a differenceto the Company’s operations include economic and politicalconditions in India and other countries in which the Company mayoperate, volatility in interest rates, changes in governmentregulations and policies, tax laws, statutes and other incidentalfactors. The Company does not undertake to update thesestatements


Standalone Financial StatementsIndependent Auditors’ Report .............................................................................................30Balance Sheet ........................................................................................................................... 40Statement of Profit and Loss............................................................................................... 41Cash Flow Statement ............................................................................................................. 42Statement of Changes in Equity.......................................................................................... 44Notes on Financial Statements ..........................................................................................45

Consolidated Financial StatementsIndependent Auditors’ Report .............................................................................................83Balance Sheet ........................................................................................................................... 90Statement of Profit and Loss............................................................................................... 91Cash Flow Statement ............................................................................................................. 92Statement of Changes in Equity.......................................................................................... 94Notes on Financial Statements ..........................................................................................95


30

Independent Auditor’s Report

To the Members of Jagatjit Industries Limited

Report on the Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statementsof Jagatjit Industries Limited (“the Company”), which comprise theBalance Sheet as at March 31, 2020, the Statement of Profit andLoss (including Other Comprehensive Income), the Statement ofChanges in Equity and the Statement of Cash Flows for the yearended on that date, and notes to the standalone financialstatements, including a summary of the significant accountingpolicies and other explanatory information (hereinafter referred toas “the standalone financial statements”).

In our opinion and to the best of our information and according tothe explanations given to us, except the effects of matter describedin the Basis for Qualified Opinion section of our report, the aforesaidstandalone financial statements give the information required bythe Companies Act, 2013 as amended(“the Act”) in the mannerso required and give a true and fair view in conformity with theaccounting principles generally accepted in India, of the state ofaffairs of the Company as at March 31, 2020, its loss includingother comprehensive loss, changes in equity and its cash flows forthe year ended on that date.

Basis for qualified opinion

(i) In the opinion of the management, Trade Receivable andLoans & Advances have a value on realization in the ordinarycourse of business, at least equal to the carrying amountin the books.

Company has a policy of providing for (a) all debtsoutstanding beyond 3 years or (b) where recovery isconsidered doubtful irrespective of the fact that legal actionhas been initiated or not, instead on the method prescribedunder IND AS 109. Company does not have effective systemof obtention of confirmations from Trade Receivables/Payables (including confirmation of Registered MSMESuppliers) and other Advances. The financial impact of thisis not ascertainable and to that extent we cannot commentupon the adequacy of provision for Expected Credit loss/doubtful debts/advances to the suppliers. However, non-moving debts and advances to suppliers outstanding beyond1 year are to the extent of ` 1564 Lakhs which is staticbalance for which confirmations and reconciliations arenot available and have not been provided for.

Further, Trade payables, Loan & advance and tradereceivable (other than above) are subject to reconciliation& confirmation. The financial impact of all this is notascertainable and to that extent we cannot comment uponthe veracity of such balances.

(ii) The Company has written back interest payable of` 216 Lakhs (provided prior to FY 2018-19) to unidentified

MSME suppliers. Management is of view that these areunidentified and a liability no longer required.

(iii) Physical verification of inventories: Due to Covid-19Pandemic lockdown management could not conduct thephysical verification of all inventories at reporting date. It isinformed by the management that physical verification wasconducted subsequently and no material discrepancy wasfound.

We were not able to attend the physical verification aslockdown was effective, therefore, we were unable to verifythe existence/condition of inventories of ` 1485 Lakhsraw material, ̀ 243 Lakhs packing materials, ̀ 501 Lakhswork-in-progress, ̀ 1441 Lakhs finished goods, ̀ 19 Lakhsstock-in-trade and ` 499 Lakhs stores and spares todetermine the adjustments that may be required to bemade in the value of inventory and consequential effectthereof on financial statement as on March 31, 2020.

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under section143(10) of the Act. Our responsibilities under those Standardsare further described in the Auditor’s Responsibilities for the Auditof the Standalone Financial Statements section of our report. Weare independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India(ICAI) together with the independence requirements that arerelevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder, and wehave fulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI’s Code of Ethics. We believe thatthe audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion on the standalone financialstatements.

Emphasis of Matter

(i) We draw attention to Note No. 4(vii) regarding fair value ofinvestment properties, Note No. 5(iii) regarding provision forinvestment in Subsidiary, Note No. 6(i)&(iii) regarding loan toemployees & provision for loan to ex-employee, Note No. 6(ii)regarding provision of loan to Subsidiary, Note No 8(iv)regarding provision for advances to others, Note No 9(ii)regarding non-moving inventories, Note No 11(i) regardingunidentified bank balances written off, Note 14(i) regardingamount receivable from group company, Note No 15 regardingassets held for sale, Note No 18(iv) regarding classification ofloan, Note No 18(v) regarding non stipulation of terms andconditions of loan, Note No. 22(ii) regarding provision of servicetax, Note No. 23(i)&(ii) regarding provision of interest onoutstanding amount of MSME suppliers and classification ofoutstanding of MSME supplier as other than MSME, Note No24(iii) regarding adjustment of advances, Note No 24(iv)regarding amount payable to ex-employee, Note No.25(i)


The Key Audit Matter How the matter was addressed in our audit

(a) Litigation Matters:

The company operates in various states within India, exposing it to avariety of different Central and State Laws, regulations andinterpretations thereof. In this regulatory environment, there is aninherent risk of litigation and claims.

Consequently, provisions and contingent liability disclosures may arisefrom direct and indirect tax proceeding, legal proceedings includingregulatory and other government / department proceedings, as wellas investigations by authorities and commercial claims.

At March 31, 2020, the Company’s contingent liabilities for legalmatters were ̀ 1921 Lakhs (refer Note 37 to the standalone financialstatement) and provision for service tax aggregated 353 Lakhs (referNote 22(A)). The most significant contingent liability pertains to servicetax of ` 389 Lakhs and sales tax of ` 1296 Lakhs.

Management applies significant judgment in estimating the likelihoodof the future outcome in each case when considering whether, andhow much, to provide or in determining the required disclosure for thepotential exposure of each matter. This is due to the highly complexnature and magnitude of the legal matters involved along with the factthat resolution of tax and legal proceedings may span over multipleyears, and may involve protracted negotiation or litigation.

These estimates could change substantially overtime as new factsemerge as each legal case progresses.

Given the inherent complexity and magnitude of potential exposuresacross the Company and the judgment necessary to estimate theamount of provisions required or to determine required disclosures,this is a key audit matter.

Reviewing the outstanding litigations against the Companyfor consistency with the previous years. Enquire and obtainexplanations for movement during the year.

Discussing the status of significant known actual and potentiallitigations with the Company’s in-house officials and othersenior management personnel who have knowledge of thesematters and assessing their responses.

Reading the latest correspondence between the Companyand the various tax/legal authorities and review ofcorrespondence with/legal opinions obtained by themanagement, from external legal advisors, where applicable,for significant matters and considering the same in evaluatingthe appropriateness of the Company’s provisions ordisclosures on such matters.

Examining the Company’s legal expenses and reading theminutes of the board meetings, in order to ensure that allcases have been identified.

With respect to tax matters, involving our tax specialists,and discussing with the Company’s tax officers, their viewsand strategies on significant cases, as well as the relatedtechnical grounds relating to their conclusions based onapplicable tax laws.

Assessing the decisions and rationale for provisions held orfor decisions not to record provisions or make disclosures.

For those matters where management concluded that noprovisions should be recorded, considered the adequacy andcompleteness of the Company’s disclosures.

regarding advance from customers, Note No 25(ii)(b)regarding adjustment of service tax payable, Note No 26(iii)regarding income from franchisee business, Note No 27(iii)regarding other income, Note No. 32(i) regarding interest paidon account of full & final settlement, Note No 45(iii) regardingoutbreak of COVID-19 and Note No. 45(iv) regarding internalaudit issues.

(ii) Company has taken loan of ̀ 4020 Lakhs (` 3672 Lakhs takenduring the year) from its Associate Company and vide its BoardResolution dated 14.02.2020, loan amount of ` 4000 Lakhshave been written back as not payable on confirmation ofassociate company and treated as income. This has resultedin reduction of loss of the year by ` 4000 Lakhs.

(iii) Going Concern:

Without qualifying our opinion, we draw attention to Note 2.1(iii) in the financial statements which indicates that theCompany has been suffering losses for the last seven yearsand the net working capital of the company is negative. Duringthe year March 31, 2020 Company suffered net loss of `5165 Lakhs. These conditions along with other matters asset forth in Note 2.1 (iii), indicate the existence of a material

uncertainty that may cast significant doubt about thecompany’s ability to continue as a going concern. Companyhas disclosed the mitigating factors vide the said Note and wehave relied upon the same.

(iv) The Internal Audit system of the company needs to besubstantially strengthened in scope, coverage and compliancein respect of Hamira Plant and Head Office operations.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of the standalonefinancial statements of the current period. These matters wereaddressed in the context of our audit of the standalone financialstatements as a whole, and in forming our opinion thereon and wedo not provide a separate opinion on these matters. In addition tothe matter described in the basis of qualified opinion section wehave determined the matters described below to be the Key AuditMatter to be communicated in our report. For each mattermentioned below, our description of how our audit addressed thematter is provided in that context.

Financial Statements (Standalone)


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(b) Loan to employees:

Company has given loan of ` 474 Lakhs to its senior employees inearlier years. Stipulation of repayment is not laid out. Managementhas represented that the amount will be recovered during the courseof time without specifying the time frame.

(c) Revenue recognition from sale of products:

Revenue from sale of products is recognized when control of productshas transferred to the customer and there is no unfulfilled obligationthat could affect the customer’s acceptance of products. Revenue fromthe sale of products is measured at the fair value of the considerationreceived and receivable, net of returns and allowances, discounts andincentives.

Significant judgment is required in estimating accruals relating toallowances, discounts and incentives recognized in relation to salesmade during the year.

Our procedures included:

We have perused the detail and have verified the repaymentsmade by employers during the year.

We have verified balance confirmation.

We have advised the company to specify the time frame forrecovery of the same.

We have disclosed the issue in the emphasis of matterparagraph.

Our audit procedures included, amongst others, assessingthe Company’s revenue recognition accounting policy,including those relating to allowances, discounts, andincentives.

We understood, evaluated and tested the operatingeffectiveness of internal controls over recognition of revenue,discounts, and incentives.

We performed test of details, on a sample basis, andinspected the underlying documents relating to sales andaccrual of discounts and incentives.

We tested sales transactions near year end date as well ascredit notes issued after the year end date.

We discussed and evaluated management assessment ofestimates relating to allowances, discounts and incentives.

We assessed the disclosures in the standalone financialstatements in respect of revenue.

Information Other than the Standalone Financial Statementsand Auditor’s Report Thereon

The Company’s management and Board of Directors areresponsible for the preparation of the other information. The otherinformation comprises the information included in the Company’sannual report, but does not include the financial statements andour auditor’s report thereon.

Our opinion on the standalone financial statements does not coverthe other information and we do not express any form of assuranceconclusion thereon.

In connection with our audit of the standalone financial statements,our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistentwith the standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materiallymisstated. If, based on the work we have performed, we concludethat there is a material misstatement of this other information, weare required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged withGovernance for the Standalone Financial Statements

The Company’s Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparationof these standalone financial statements that give a true and fairview of the financial position, financial performance, totalcomprehensive income, changes in equity and cash flows of theCompany in accordance with the Ind AS and other accounting

principles generally accepted in India. This responsibility alsoincludes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that arereasonable and prudent; and design, implementation andmaintenance of adequate internal financial controls, that wereoperating effectively for ensuring the accuracy and completenessof the accounting records, relevant to the preparation andpresentation of the standalone financial statements that give a trueand fair view and are free from material misstatement, whetherdue to fraud or error.

In preparing the standalone financial statements, management isresponsible for assessing the Company’s ability to continue as agoing concern, disclosing, as applicable, matters related to goingconcern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to ceaseoperations, or has no realistic alternative but to do so.

Those Charged with Governance are also responsible for overseeingthe Company’s financial reporting process.

Auditor’s Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whetherthe standalone financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issuean auditor’s report that includes our opinion. Reasonable assurance


is a high level of assurance, but is not a guarantee that an auditconducted in accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraudor error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalonefinancial statements.

As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional skepticism throughout theaudit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements, whether due to fraud or error,design and perform audit procedures responsive to those risks,and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting amaterial misstatement resulting from fraud is higher than forone resulting from error, as fraud may involve collusion, forgery,intentional omissions, misrepresentations, or the override ofinternal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i) ofthe Act, we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controlssystem in place and the operating effectiveness of suchcontrols.

• Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and relateddisclosures made by management.

• Conclude on the appropriateness of the Board of Directors’use of the going concern basis of accounting and, based onthe audit evidence obtained, a material uncertainty existsrelating to events or conditions that may cast significant doubton the Company’s ability to continue as a going concern. Wedraw attention on emphasis of matter paragraph (statedabove) in our audit report explaining indicator of existence ofmaterial uncertainty that may cast significant doubt on theCompany’s ability to continue as a going concern and mitigationfactors given by the management in Note No 2.1(iii) of thefinancial statements.

• Evaluate the overall presentation, structure and content ofthe standalone financial statements, including the disclosures,and whether the standalone financial statements representthe underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding,among other matters, the planned scope and timing of the auditand significant audit findings, including any significant deficienciesin internal control that we identify during our audit.

We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.

From the matters communicated with those charged with

governance, we determine those matters that were of mostsignificance in the audit of the standalone financial statements ofthe current period and are therefore the key audit matters. Wedescribe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when,in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverseconsequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order, 2016(“the Order”) issued by the Central Government of India interms of sub-section (11) of section 143 of the Act, we give inthe “Annexure A”, a statement on the matters specified inthe paragraph 3 and 4 of the order.

2. With respect to matter to be included in the Auditor’s reportunder section 197(16) of the Act:

In our opinion and according to the information andexplanations given to us, the managerial remuneration for theyear ended March 31, 2020 has been paid/provided by theCompany to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act.

3. As required by Section 143 (3) of the Act, we report that:

(a) we have sought and obtained all the information andexplanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit;

(b) in our opinion proper books of account as required by lawhave been kept by the Company so far as it appears fromour examination of those books;

(c) the balance sheet, the statement of profit and lossincluding other comprehensive income, statement ofchanges in equity and the statement of cash flow dealtwith by this Report are in agreement with the books ofaccount;

(d) in our opinion, the aforesaid standalone financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act, read withCompanies (Indian Accounting Standards) Rules, 2015,as amended;

(e) on the basis of the written representations received fromthe directors as on 31 March 2020 taken on record bythe Board of Directors, none of the directors is disqualifiedas on 31 March 2020 from being appointed as a directorin terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financialcontrols over financial reporting of the Company and theoperating effectiveness of such controls, refer to ourseparate report in “Annexure B”; and

(g) with respect to the other matters to be included in theAuditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in ouropinion and to the best of our information and accordingto the explanations given to us:



34

i. the Company has disclosed the impact of pendinglitigations on its financial position in its financialstatements;

ii. the Company did not have any long term contractsincluding derivative contracts for which there wereany material foreseeable losses;

iii. there has not been delay in transferring amountswhich were required to be transferred, to theInvestor Education and Protection Fund by theCompany.

for Madan & AssociatesChartered Accountants

Firm’s registration number: 000185N

M. K. MadanPlace: New Delhi ProprietorDate: 03.09.2020 Membership number: 082214UDIN: 20082214AAAACF7989


Statement of the matters specified in paragraph 3 and 4 of theCompanies (Auditor’s report) Order, 2016 (‘the Order’)

The Annexure referred to in Independent Auditors’ Report to themembers of the Jagatjit Industries Limited (“the company”) onthe standalone financial statements for the year ended March 31,2020, we report that:

(i) In respect of fixed assets:

(a) The Company has maintained proper records showingfull particulars, including quantitative details and situationof fixed assets.

(b) The Company has a programme of annual verification offixed assets which, in our opinion, is reasonable havingregard to the size of the company and the nature of itsassets. It is informed by the management, as per the saidprogramme, physical verification was scheduled at theyear end but due to Covid-19 Pandemic lockdownmanagement could not conduct the same. Therefore,we are unable to comment on the existence of fixedassets.

(c) According to the information and explanations given tous and on the basis of our examination of the records ofthe Company and certificate provided by the Company,the title deeds of immovable properties are held in thename of the Company except in respect of Immovableproperties situated at 4th and 5th Floor, Bhandari House,Nehru Place, New Delhi, 9th & 10th Floor, Ashoka Estate,Barakhamba Road, New Delhi, 7th Floor, Shanti NiketanBuilding, Camac Street, Kolkata 700017 and 4th Floor,Embassy Centre, Nariman Point, Mumbai. It is certifiedby the management that the company is in possession ofthese properties.

Title deeds in respect of Immovable Properties asmentioned in Note No. 18 are held by the lenders asEquitable Mortgage against the borrowing. Confirmationsfrom the bank are not received.

Company has provided photocopies of the title deeds/lease deeds in respect of Leasehold Land situated atSahibabad (U.P.) as the originals are held by Uttar PradeshState Industrial Development Corporation (UPSIDC).

(ii) In respect of inventories: Due to Covid-19 Pandemic lockdownmanagement could not conduct the physical verification ofall inventories at reporting date. It is informed by themanagement that physical verification was conductedsubsequently and no material discrepancy was found. Wewere not able to attend the physical verification as lockdownwas effective, therefore, we were unable to verify theexistence/condition of inventories and accordingly we havequalified the report regarding this (refer basis for qualifiedopinion).

ANNEXURE–‘A’TO THE INDEPENDENT AUDITOR’S REPORT

(iii) (a) According to Information and explanation given to us, theCompany has granted loan to its subsidiaries in earlieryears. No loan was granted to any entity covered in theregister maintained u/s 189 of the Companies Act, 2013during the current year.

(b) In respect of above loans, the Company has received` 1988 Lakhs from one of the subsidiaries and madeprovision of ` 185 Lakhs during the year in respect ofanother subsidiary due to erosion of its net worth.

(iv) (a) In our opinion and according to the information andexplanations given to us, the Company has not given anyloans and made any investment within the meaning ofsection 185 & 186 of the Act. Thus, paragraph 3(iii) ofthe Order is not applicable to the Company.

(b) Company has represented before us that provision ofsection 185/186 are not applicable for advances givenprior to Companies Act 2013 and are still outstanding.

(v) According to the information and explanation given to us, thecompany has not accepted any deposits during the year exceptadvance of ̀ 857 Lakhs from a customer which is adjustablein 60 equal installments of ` 15 Lakhs each w.e.f. July2020. The company has adjusted the amount of currentoutstanding of ` 642 Lakhs and shown ` 215 Lakhs asadvance from customer. Management is of the view thatthe same is not a deposit within the meaning of Section2(31) read with Acceptance of Deposit rules 2014.

In respect of amounts accepted in earlier years ourobservations are as under:

(a) Advance from customers of ` 422 Lakhs outstandingfor more than 365 days. The Company is of the viewthat the amount is not deposit from customers butneeds to be adjusted against debit balance ofreceivables. Pending reconciliation, amount is shownas advance from customers.

(b) Similarly company had received amount of ̀ 700 Lakhsin earlier years which is claimed as exempted deposit.Company has informed us that it will re-examine theentire issue and take Legal opinion on the same.

Pending reconciliation and legal opinion, we are unable tocomment upon these deposits. Company is of the view thatprovision of Section 74(1)(b) of the Act are complied with inpursuance of Rule 19 of the Acceptance of Deposits Rules,2014. It is also confirmed by the company that no order hasbeen passed by the Company Law Board or National CompanyLaw Tribunal or Reserve Bank of India or any Court or anyother Tribunal.

(vi) According to the information and explanations given to us andcertified by the management, provision of Section 148(1) of



36

the Companies Act, 2013 for maintenance of Cost recordsare not applicable as products manufactured by the companyas specified in Table A/Table B under rule 3 of Companies(Cost Records & Audit Rules), 2014 represent by-product andno cost is incurred for the same.

(vii) In respect of statutory dues:

(a) According to the information and explanations given tous and on the basis of our examination of the records ofthe Company, the company has generally been regular indepositing undisputed statutory dues, including providentFund, Employees State insurance, income tax, sales tax,wealth tax, service tax, duty of customs, duty of excise,

value added tax, cess and other material statutory duesapplicable to it with the appropriate authorities. Therewere no undisputed amounts payable in respect of theaforesaid statutory dues in arrears as at 31.03.2020for a period of more than six months from the date theybecame payable.

(b) (i) According to the information and explanations givento us, there are no dues of income tax, sales tax,wealth tax, service tax, duty of customs, duty of excise,value added tax, cess which have not been depositedas at 31.03.2020 on account of any dispute exceptas follows:

Sr. Name of Statute Nature of Dues Amount (`) Period for which Forum whereNo. the amount relates dispute is pending.

SERVICE TAX

1 The Finance Act, 1994 Wrong availment of Service 53,82,166 October 2003 to CESTAT, ChandigarhTax Cenvat Credit September 2007

2 The Finance Act, 1994 Penalty in the above matter 53,82,166 October 2003 to CESTAT, ChandigarhSeptember 2007

3 The Finance Act, 1994 Wrong availment of Service 69,70,632 October 2007 to CESTAT, ChandigarhTax Cenvat Credit March 2008

4 The Finance Act, 1994 Penalty in the above matter 69,70,632 October 2007 to CESTAT, ChandigarhMarch 2008

5 The Finance Act, 1994 Demand and Penalty towards 17,97,534 June, 2005 CESTAT, ChandigarhManagement maintenanceand Repair Services

6 The Finance Act, 1994 Demand and Penalty towards 62,21,720 May 2008 to CESTAT, Chandigarhconversion charge for SMP & April 2010Ghee under category of Supplyof Tangible Goods

7 The Finance Act, 1994 Penalty in the above matter 62,21,720 May 2008 to CESTAT, ChandigarhApril 2010

SALES TAX

8 Sales Tax under Demand and Penalty on account 1,03,00,000 2012-13 to Appellate DeputyTelangana VAT Act of VAT on Royalty Income November 2014 Commissioner, Hyderabad

9 Sales Tax under Punjab Demand and Penalty on account 2,19,67,703 2010-11 Deputy Excise and TaxationVAT Act & Central of disallowance of VAT input Commissioner (Appeals),Sales Tax Act credit on Rice Husk Jalandhar

10 Sales Tax under Demand and Penalty on account 39,69,900 2011-12 Joint Excise & TaxationHaryana VAT Act of disallowance of VAT input Commissioner (A), Rohtak

credit on Rice Husk

11 Sales Tax under Demand in respect to VAT 20,32,974 2013-14 Commissioner (Appeals),Jharkhand VAT Act assessment Ranchi

12 Sales Tax under Punjab Disallowance of ITC on purchase 1,07,54,088 2011-13 VAT Appellate TribunalVAT Act & Central of Rice FlourSales Tax Act

13 Rajasthan VAT Act. Demand in respect of VAT 3,79,205 2015-16 & VAT Commissioner, Rajasthan2016-17

14 Jharkhand VAT Act Demand in respect of VAT 3,97,965 2014-15 Commissioner (Appeals),Ranchi

15 Rajasthan VAT Act. Demand in respect of VAT 7,96,76,109 VAT Commissioner, Rajasthan


(ii) Company made provision for service tax of ` 353Lakhs demanded by Orissa State BeveragesCorporation Ltd. against their liability to service taxin earlier year. The matter is pending before ServiceTax Tribunal Orissa.

(viii) According to the information and explanations given to us, theCompany has not defaulted in repayment of loans or borrowingto a financial institution, bank, Government during the year.

(ix) In our opinion and according to the information and explanationgiven to us, the term loans have been applied by the companyduring the year for the purposes for which they were obtained.

(x) According to the information and explanations given to us, nomaterial fraud by the Company or on the Company by itsofficers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given by themanagement, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to theCompanies Act, 2013.

(xii) In our opinion and according to the information andexplanations given to us, the Company is not a nidhi company.Accordingly, paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us andon the basis of Legal opinion (regarding maintenance chargesof ̀ 215 Lakhs paid to Corporate Facility Management) [refer

Note No. 39B(iv)(b)] obtained by the company in earlier yearsand based on our examination of the records of the Company,transactions with the related parties are in compliance withsections 177 and 188 of the Act where applicable and detailsof such transactions have been disclosed in the financialstatements as required by the applicable Ind AS.

(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company, theCompany has not made any preferential allotment or privateplacement of shares or fully or partly convertible debenturesduring the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company, theCompany has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly,paragraph 3(xv) of the Order is not applicable.

(xvi) The Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934.






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Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

We have audited the internal financial controls with reference tostandalone financial statements of Jagatjit Industries Limited (“theCompany”) as of March 31, 2020 in conjunction with our audit ofthe standalone financial statements of the Company for the yearended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s Management is responsible for establishing andmaintaining internal financial controls based on the internal financialcontrols with reference to standalone financial statements criteriaestablished by the Company considering the essential componentsof internal control stated in the Guidance Note. Theseresponsibilities include the design, implementation and maintenanceof adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business,including adherence to Company’s policies, the safeguarding of itsassets, the prevention and detection of frauds and errors, theaccuracy and completeness of the accounting records, and thetimely preparation of reliable financial information, as required underthe Companies Act, 2013.

Auditors’ Responsibility

Our responsibility is to express an opinion on the Company’s internalfinancial controls with reference to standalone financial statementsbased on our audit. We conducted our audit in accordance withthe Guidance Note and the Standards on Auditing, as prescribedunder section 143(10) of the Act, to the extent applicable to anaudit of internal financial controls and, both issued by the Instituteof Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with the ethical requirementsand plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with referenceto standalone financial statements was established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with referenceto standalone financial statements and their operatingeffectiveness. Our audit of internal financial controls with referenceto standalone financial statements included obtaining anunderstanding of such internal financial, assessing the risk that amaterial weakness exists, and testing and evaluating the designand operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of materialmisstatement of the financial statements, whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on theCompany’s internal financial controls with reference to standalonefinancial statements.

Meaning of Internal Financial Controls with reference tostandalone financial statements

A company’s internal financial control with reference to standalonefinancial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes inaccordance with generally accepted accounting principles. Acompany’s internal financial control over financial reporting includesthose policies and procedures that (1) pertain to the maintenanceof records that, in reasonable detail, accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2)provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements inaccordance with generally accepted accounting principles, and thatreceipts and expenditures of the company are being made only inaccordance with authorizations of management and directors ofthe company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition, use, ordisposition of the company’s assets that could have a material effecton the financial statements

Inherent Limitations of Internal Financial Controls with referenceto standalone financial statements

Because of the inherent limitations of internal financial controlswith reference to standalone financial statements, including thepossibility of collusion or improper management override ofcontrols, material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluation of theinternal financial controls with reference to standalone financialstatements to future periods are subject to the risk that the internalfinancial controls with reference to standalone financial statementsmay become inadequate because of changes in conditions, or thatthe degree of compliance with the policies or procedures maydeteriorate.

Qualified Opinion

In our opinion, the Company generally has, in all material respects,an adequate internal financial controls with reference to standalonefinancial statements and such internal financial controls overfinancial reporting were generally operating effectively as at March31, 2020, except in respect of trade receivable reconciliation/confirmation, provision for bad and doubtful debts and accountspayable reconciliation/confirmation where controls were foundto be ineffective and in respect of various areas namely updatingof status of contingent liabilities, Rolling Cash Plan (HO), recoveryof loan & advances from employees/suppliers, Full & Finalsettlement of employees, Revenue recognition of royalty incomefrom franchise operation, revenue recognition of third partysupply agreement and operating assessment of controlregarding updating the Secretarial Department in respect ofborrowings from Group entities where controls were effectivebut need to be strengthened, based on the internal control withreference to standalone financial statements criteria established

ANNEXURE ‘B’ TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OFJAGATJIT INDUSTRIES LIMITED


by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute ofChartered Accountants of India (the “Guidance Note”).






40

(` in Lakhs)Particulars Notes As at As at

March 31, 2020 March 31, 2019ASSETS1 Non-current assets

a) Property, plant and equipment 3A 37,268 38,046b) Other intangible assets 3B - 2c) Capital work-in-progress 3C 18 22d) Right-of-use assets 3D 20 -e) Investment properties 4 1,790 1,837f) Financial assets

i) Investments 5 33 1,798ii) Loans 6 476 1,988iii) Other financial assets 7 1,213 1,513

g) Other non-current assets 8 445 1,167Total non-current assets 41,263 46,373

2 Current assetsa) Inventories 9 4,189 3,942b) Financial assets

i) Trade receivables 10 2,861 6,581ii) Cash and cash equivalents 11 1,097 950iii) Loans 12 57 894iv) Other financial assets 13 76 395

c) Other current assets 14 1,009 2,446d) Assets classified as held for sale 15 38 1,938Total current assets 9,327 17,146TOTAL- ASSETS 50,590 63,519

EQUITY AND LIABILITIESEquityEquity share capital 16 4,615 4,615Other equity 17 (580) 4,585Total equity 4,035 9,200LIABILITIES1 Non-current liabilities

a) Financial liabilitiesi) Borrowings 18A 19,919 20,432ii) Other financial liabilities 19 3,348 3,647iii) Lease liability 20 3 -

b) Other long term liabilities 21 324 434c) Provisions 22A 2,378 2,245d) Deferred tax liabilities - 244Total non-current liabilities 25,972 27,002

2 Current liabilitiesa) Financial liabilities

i) Borrowings 18B 214 1ii) Trade payables 23 6,763 7,357iii) Other financial liabilities 24 5,872 11,259iv) Lease liability 20 19 -

b) Other current liabilities 25 7,270 8,276c) Provisions 22B 445 424Total Current liabilities 20,583 27,317Total liabilities 46,555 54,319Total equity and liabilities 50,590 63,519

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements

As per our report of even dateFor Madan & Associates For and on behalf of the Board of Directors ofChartered Accountants JAGATJIT INDUSTRIES LIMITEDFRN: 000185N

M. K. Madan Ravi Manchanda Sushma SagarProprietor Managing Director DirectorMembership No.: 082214 DIN: 00152760 DIN : 02582144

Anil Vanjani Anil GirotraChief Executive Officer Chief Financial Officer

Place : New Delhi Roopesh KumarDate : September 03, 2020 Company SecretaryUDIN: 20082214AAAACF7989

Balance Sheetas at March 31, 2020


(` in Lakhs)Particulars Notes For the year ended For the year ended

March 31, 2020 March 31, 20191 Income

a) Revenue from operations 26 22,528 24,925b) Other income 27 4,803 5,462Total income 27,331 30,387

2 Expensesa) Cost of material consumed 28 8,872 6,993b) Purchases of Stock-in-trade 29 618 478c) Changes in inventories of finished goods, work in progress and stock in trade 30 (343) 1,411d) Excise duty 461 2,499e) Employee benefit expenses 31 5,994 6,860f) Finance cost 32 4,211 7,259g) Depreciation and amortisation expenses 33 965 1,044h) Other expenses 34 13,523 10,830Total expenses 34,301 37,374

3 Profit/(loss) before tax (6,970) (6,987)4 Exceptional items (Income) 35 2,868 3735 Profit / (Loss) before tax and after exceptional items (4,102) (6,614)6 Tax expense:

Income tax adjustment related to earlier years - 92Derecognition of MAT credit 968 -Deferred tax (credit)/ charge (244) (234)Total tax expenses 724 (142)

7 Profit / (Loss) for the period from continuing operations (4,826) (6,472)8 Profit / (Loss) for the period from discontinuing operations 41 (61) (116)

Tax expenses from discontinuing operations - -9 Profit / (Loss) for the period (4,887) (6,588)10 Other Comprehensive Income

Items that will not be reclassified to profit or lossRe-measurement (gains)/losses on defined benefit plans 278 60Tax impact on re-measurement (gain)/ loss on defined benefit plans - (21)Total Other Comprehensive Income 278 39

11 Total Comprehensive Income for the period (9 - 10) (5,165) (6,627)(Comprising Profit / (Loss) and Other Comprehensive Income for the period)

12 Earnings per share for continuing operations (in `̀̀̀̀):Basic & Diluted 36 (11.06) (14.83)Earnings per share for discontinued operations (in `̀̀̀̀):Basic & Diluted 36 (0.14) (0.26)Earnings per share (for continuing and discontinued operations) (in `̀̀̀̀):Basic & Diluted 36 (11.20) (15.09)

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements.





Statement of Profit and Lossfor the year ended March 31, 2020



42

(` in Lakhs)

Particulars For the year ended For the year endedMarch 31, 2020 March 31, 2019

A. Cash flow from operating activities:

Net loss for the year before tax (4,163) (6,730)

Adjustments for:

Rent from investment properties (2,048) (2,000)

Fair valuation of investments 13 (600)

Depreciation 965 1,044

Interest expense 4,211 7,259

Interest income (122) (221)

Profit on sale of properties, plant and equipment (net) (111) (361)

Provision for investments 1,020 -

Provision for loans to subsidiary 185 -

Bad debts/advances/stock written off 933 192

Provision for doubtful debts and advances 2,976 1,484

Provision for obsolete/damaged inventory 146 155

Profit on sale of investment - (650)

Liability no longer required written back towards loans (4,000) -

Liability no longer required written back (1,572) (1,132)

Provision for Gratuity & Leave Encashment & others 154 24

Operating profit before working capital changes (1,413) (1,536)

Changes in working capital

Trade receivables 1,390 4,148

Loans, other financial assets and other assets 1,145 2,839

Inventories (378) 1,752

Trade payables (594) (3,149)

Financial liabilities, other liabilities and provisions 1,483 1,023

Cash generated from operations 1,633 5,077

Taxes (Paid)/ Received (Net of TDS) - -

Net Cash flow/(used) from operating activities (A) 1,633 5,077

B. Cash flow from investing activities:

Purchase of property, plant and equipment including capital (152) (158)work-in-progress and capital

Advances against assets held for sale 100 3,927

Proceeds from sale of property, plant and equipment 176 421

Purchase of investments property - (9)

Sale of investments 745 713

Refund from subsidiaries 1,802 1,182

Interest received (Revenue) 136 309

Income from investment properties 2,048 2,000

Release/(Addition) of cash (from)/for restrictive use 254 (725)

Net Cash inflow from investing activities (B) 5,109 7,660

Standalone Cash Flow Statementfor the year ended March 31, 2020


(` in Lakhs)


C. Cash flow from financing activities:

Net Loans (repaid) / taken (6,283) (5,648)

Lease liability payments (32) -

Loans written back 4,000 -

Interest paid (4,280) (7,335)

Net cash used in financing activities ( C) (6,595) (12,983)

Net increase/ (decrease) in cash & cash equivalents (A + B + C) 147 (246)

Cash and cash equivalents at the beginning of the year 950 1,196

Cash and cash equivalents at the end of the year 1,097 950

Cash & cash equivalents comprises of

Cash, cheques & drafts (in hand) and remittances in transit 26 13

Balance with scheduled banks 1,071 937

1,097 950

(i) The aforesaid Cash Flow Statement has been prepared under the “Indirect Method” and in accordance with Ind AS -7 on Cash Flow Statements.

(ii) Figures in brackets indicate cash outgo.

The accompanying notes are an integral part of the financial statements.





Standalone Cash Flow Statement (Contd.)for the year ended March 31, 2020



44

A. Equity share capital:

Issued, subscribed and fully paid up (Share of `̀̀̀̀ 10 each) No. of shares Amount in `̀̀̀̀

At April 01, 2018 46,148,112 461,481,120

Increase/(decrease) during the year - -

At March 31, 2019 46,148,112 461,481,120


At March 31, 2020 46,148,112 461,481,120

B. Other equity(` in Lakhs)

Particulars Reserve & Surplus Other TotalComprehensive

Income

General Capital Securities Retained RemeasurementReserve Redemption Premium Earnings of defined benefit

obligations

Balance as at March 31, 2018 2,016 580 3,697 5,557 (293) 11,557

Revaluation adjusted (345) (345)

Profit/(loss) for the year - - (6,588) - (6,588)

Other comprehensive income for the year - - - (39) (39)

Balance as at March 31, 2019 2,016 580 3,697 (1,376) (332) 4,585

Adjustment for Lease liability - -

Profit/(loss) for the year (4,887) (4,887)

Other comprehensive income for the year (278) (278)

Balance as at March 31, 2020 2,016 580 3,697 (6,263) (610) (580)






Statement of Changes in Equityfor the year ended March 31, 2020


SIGNIFICANT ACCOUNTING POLICIES AND NOTES TOACCOUNTS

1. Corporate information

Jagatjit Industries Limited (“the Company”) is a Public LimitedCompany domiciled in India and incorporated under theprovisions of the Indian Companies Act, 1913. The registeredoffice of the Company is located at Jagatjit Nagar, Distt.Kapurthala, Punjab 144802, India. Its shares are listed onthe BSE Limited. The Company is primarily engaged in themanufacture and sale of Liquor products and job work forfood products. The Company has manufacturing plants atKapurthala (Punjab), and Behror (Rajasthan).

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 Basis of preparation and compliance with Ind AS:

(i) The Company prepared its financial statements inaccordance with Indian Accounting Standards (Ind AS)notified under Section 133 of the Companies Act,2013 read together with Rule 4A of the Companies(Indian Accounting Standards) Rules, 2015 asamended, to the extent applicable, and thepresentation requirements of Division II of Schedule IIIto the Companies Act, 2013.

(ii) Transactions in currencies other than the Company’sfunctional currency (foreign currencies) arerecognized at the rates of exchange prevailing at thedates of the transactions.

At the end of each reporting period, monetary itemsdenominated in foreign currencies are retranslatedat the rates prevailing at that date. Exchangedifferences on monetary items are recognized in theStatement of Profit and Loss in the period in whichthey arise.

Non-monetary items that are measured in terms ofhistorical cost in a foreign currency are notretranslated.

(iii) The Accounts have been prepared on Going ConcernBasis. The Company has been suffering losses for thelast seven years and the net working capital of theCompany is negative. During the year March 31, 2020,Company suffered net loss of ` 5,165 Lakhs. In theopinion of Management, the Company has sufficientresources to survive and curb the losses incurred andthere is no intention of management to liquidate theentity. The Company has undertaken following stepsin order to curtail the losses and to make the workingcapital positive :-

(a) The Company has restarted its business ofdistillery during the last quarter of 2019-20 andpositive results are expected to contribute to

the growth of the company during next financialyear.

(b) The Company had initiated the process ofmonetizing its surplus immovable property atSahibabad (UP) and Sikanderabad (UP) to repaydebts / reduce finance cost and enhance itsworking capital. During the year, company hassold Sikandrabad Unit for ` 1900 Lakhs.Company has also received an amount of `4,627 Lakhs as advance for sale of SahibabadUnit till March 31, 2020, and the companyexpects to receive the balance considerationof ` 1900 Lakhs from sales of its SahibabadUnit and it will help in improving the Cash Flowposition of the company in next financial year.In the year ended March 31, 2020, total debts(other than group entity) has been reduced by` 6267 Lakhs as compared to March 31,2019. Finance cost for the year ended March31, 2020 has been reduced to ` 4211 Lakhsas compared to ` 7259 Lakhs for the previousyear.

(c) Promoters / Promoters’ Companies haveprovided its security of personal / its assets tosecure term loan. Promoters have infused `4000 Lakhs in the form of the interest free loanthrough associate company and have obtainedthe waiver of the loan.

(d) The Company has put in place a time bound planfor reduction of overheads and non-essentialexpenditures resulting in reduction of employeebenefit expenses by ` 866 Lakhs, rent by ` 72Lakhs, travelling expenses by ` 91 Lakhs andlegal expenses by ` 304 Lakhs as compared toprevious year.

(e) The company has ventured into new businessof hand sanitizers and accordingly entered intoarrangements with various parties formanufacture/ procurement of hand sanitizersfor sales & distribution. The product of thecompany appears to be well accepted in themarket as per initial reports. This will havepositive impact on the financial performance ofthe company in the coming year.

Company is of the view that in terms of varioussteps undertaken, full effect of the same will befurther visible by end of the next year and willhelp in curtailing/reducing losses.

As per the assessment of the management, thegoing concern assumption is not affected andno material uncertainty exists in this regard inview of the above mentioned factors.

Notes on Financial Statementsfor the year ended March 31, 2020



46

The Ind AS Financial Statements have beenprepared on a going concern basis usinghistorical cost convention and on an accrualmethod of accounting, except for certainfinancial assets and l iabil it ies, includingderivative financial instruments which have beenmeasured at fair value as described below anddefined benefit plans which have beenmeasured at actuarial valuation as required byrelevant Ind AS.

2.2 Current versus non-current classification:

All Assets and Liabilities have been classified as current ornon-current considering the operating cycle of 12 months.

Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.

2.3 Fair value measurement:

Fair value is the price that would be received to sell assetsor paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. Fair value formeasurement and / or disclosed in these financial statementis determined on such basis.

All Assets and Liabilities for which fair value is measured ordisclosed in the financial statements are categorised withinthe fair value hierarchy, which are described as follows; LevelI - III

Level I input

Level I input are quoted price in active market for identicalassets or liabilities that the entity can access at themeasurement date, a quoted price in an active marketprovides the most reliable evidence of fair value and is usedwithout adjustment to measure fair value whenever available,with limited exception. If an entity holds a position in a singleassets or liabilities and the assets or liabilities is traded in anactive market, the fair value of assets or liabilities held by theentity, even if the market normal daily trading volume is notsufficient to absorb the quantity held and placing orders tosell the position in a single transaction might affect the quotedprice.

Level II input

Level II inputs are those inputs other than quoted marketprices included within Level I that are observable for theassets or liabilities either directly or indirectly.

Level II inputs include:

- Quoted price for similar assets or liabilities in activemarket.

- Quoted price for identical or similar assets or liabilitiesin market that are not active.

- Input other than quoted prices that are observablefor the assets or liabilities.

- Interest rate and yield curve observable at commonlyquoted interval.

- Implied volatilise.

- Credit spreads.

- Inputs that are derived principally or from corroboratedmarket data co-relation or other means (‘marketcorroborated inputs’).

Level III input

Level III inputs are unobservable inputs for the asset or liability.Unobservable inputs are used to measure fair value to theextent that relevant observable inputs are not available,thereby allowing for situations in which there is little, if any,market activity for the asset or liability at the measurementdate. An entity develops unobservable inputs using the bestinformation available in the circumstances, which mightinclude the entity’s own data, taking into account allinformation about market participant assumptions that isreasonably available.

For assets and liabilities that are recognized in the financialstatements on a recurring basis, the Company determineswhether transfers have occurred between levels in thehierarchy by re-assessing categorisation (based on the lowestlevel input that is significant to the fair value measurementas a whole) at the end of each reporting period.

2.4 Functional and presentation currency:

These Ind AS Financial Statements are prepared in “IndianRupee” which is the Company’s functional currency. Allfinancial information presented in Rupees has been roundedto the nearest Lakhs.

2.5 Property, plant and equipment:

(i) Property, plant and equipment

The Company applied Ind AS 16 with retrospectiveeffect for all of its properties, plants and equipmentsas at the transition date, viz., April 01, 2016. On April01, 2016 the Company carried out fresh revaluationof Land owned by the Company as PPE. The revaluationwas done by an independent valuer on fair market valuebasis. Consequently, the revaluation reserveamounting to ` 26,779 Lakhs was transferred toretained earnings.

Company has been granted leasehold lands for theperiod of 99 years and accordingly, the same is treatedas finance lease. This is treated as part of propertiesplant and equipment due to duration of lease periodand availability of transfer of leasehold rights. Inabsence of absolute certainity regarding vesting of

Notes on Financial Statements (Contd.)for the year ended March 31, 2020


ownership with the Company at the determination oflease, depreciation is being charged on the revaluedfigure of Land on straight line basis over the period oflease.

The initial cost of property, plant and equipmentcomprises its purchase price, including import dutiesand non-refundable purchase taxes, attributableborrowing cost and any other directly attributablecosts of bringing an asset to working condition andlocation for its intended use. It also includes thepresent value of the expected cost for thedecommissioning and removing of an asset andrestoring the site after its use, if the recognition criteriafor a provision are met.

Expenditure incurred after the property, plant andequipment have been put into operation, such asrepairs and maintenance, are normally charged to theStatements of Profit and Loss in the period in whichthe costs are incurred. Major inspection and overhaulexpenditure is capitalized if the recognition criteria aremet.

When significant parts of plant and equipment arerequired to be replaced at intervals, the Companydepreciates them separately based on their specificuseful lives. Likewise, when a major inspection isperformed, its cost is recognised in the carryingamount of the plant and equipment as a replacementif the recognition criteria are satisfied. All other repairand maintenance costs are recognised in theStatement of Profit and Loss as incurred.

The residual values, useful lives and methods ofdepreciation of property, plant and equipment arereviewed at each financial year end and adjustedprospectively, if considered appropriate.

When an item of property, plant and equipment isscrapped or otherwise disposed off, the cost andrelated deprecation are removed from the books ofaccount and resultant profit or loss, if any, is reflectedin Statement of Profit and Loss.

(ii) Capital work in progress

Assets in the course of construction are capitalized incapital work in progress account. At the point whenan asset is capable of operating in the mannerintended by management, the cost of construction istransferred to the appropriate category of property,plant and equipment. Costs associated with thecommissioning of an asset are capitalised when theasset is available for use but incapable of operating atnormal levels until the period of commissioning hasbeen completed. Cost includes financing cost relatingto borrowed funds attributable to construction.

(iii) Depreciation

The Company depreciates property, plant andequipment over the useful life as prescribed inschedule II of the Companies Act, 2013 on thestraight-line method from the date the assets areready for intended use. Assets in the course ofconstruction and freehold land are not depreciated.In respect of following assets, different useful life istaken than those prescribed in schedule II:

Particulars Depreciation

Boiler No-5 Over its useful life as technicallyassessed (35 Years)

Turbine 7MW Over its useful life as technicallyassessed (35 Years)

Evaporator Spent Over its useful life as technicallyWash assessed (35 Years)

MMF Plant (III shift) Over its useful life as technicallyassessed (15 Years)

Leasehold land is amortised on straight line basis overthe period of lease. Leasehold Improvements areamortised on straight line basis over the useful life ofthe asset and the remaining period of lease.

2.6 Intangible Assets:

Intangible assets acquired are measured on initial recognitionat cost. Following initial recognition, intangible assets arecarried at cost less any accumulated amortisation andaccumulated impairment losses.

The useful lives of intangible assets are assessed as eitherdefinite or indefinite. Currently, Company does not have anyintangible assets with indefinite useful life. Intangible assetsare amortised over the useful economic life and assessedfor impairment whenever there is an indication to the sameeffect. The amortisation period and the amortisation methodfor an intangible asset are reviewed at least at the end ofeach reporting period. Changes in the expected useful life orthe expected pattern of consumption of future economicbenefits embodied in the asset are considered to modify theamortisation period or method, as appropriate, and aretreated as changes in accounting estimates. Generallyintangible assets are amortised @ 10% per annum on SLMbasis.

2.7 Impairment of Assets:

At the end of each reporting period, the Company assesseswhether there is any indication that an asset or a group ofassets (cash generating unit) may be impaired. If any suchindication exists, the recoverable amount of the asset or cashgenerating unit is estimated in order to determine the extentof impairment loss (if any). When it is not possible to estimatethe recoverable amount of the cash generating unit to which




48

the asset belong, recoverable amount is the higher of fairvalue less cost of disposal and value in use. In assessing thevalue in use, the estimated future cash flow is discounted attheir present value using the pre-tax discount rate thatreflects current market assessment of time value of moneyand the risks specific to the assets for which the estimatesof future cash flow have not been adjusted.

If the recoverable amount of an asset (or cash generatingunit) is estimated to be less than its carrying amount, thecarrying amount of the asset (or cash generating unit) isreduced to its recoverable amount. An impairment loss isrecognized immediately in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, thecarrying amount of the asset (or a cash generating unit) isincreased to the revised estimate of its recoverable amount,so that the increased carrying amount does not exceed thecarrying amount that would have been determined had noimpairment loss recognized.

2.8 Cash and Cash equivalent:

Cash and cash equivalent in the Balance Sheet comprise cashat banks and on hand and short-term deposits with an originalmaturity of three months or less, which are subject to aninsignificant risk of changes in value.

For the purpose of Statement of Cash Flows, cash and cashequivalents consist of cash and short-term deposits, asdefined above.

2.9 Financial instruments:

A financial instrument is any contract that gives rise to afinancial asset of one entity and a financial liability or equityinstrument of another entity. Financial assets and financialliabilities are recognized when a Company becomes a partyto the contractual provisions of the instruments.

(i) Initial recognition and measurement:

Financial assets and financial liabilities are recognizedwhen a Company becomes a party to the contractualprovisions of the instruments. Financial assets andfinancial liabilities are initially measured at fair value.Transaction costs that are directly attributable to theacquisition of financial assets or issue of financialliabilities (other than financial assets and financialliabilities at fair value through profit and loss) are addedto or deducted from the fair value of the financialassets or financial liabilities, as appropriate, on initialrecognition. Transaction costs directly attributable tothe acquisition of financial assets or financial liabilitiesat fair value through profit or loss are recognizedimmediately in the Statement of Profit and Loss.

(ii) Subsequent measurement of financial assets:

For purposes of subsequent measurement, financial

assets are classified in four categories and measuredas under:

(a) Debt instruments at amortized cost.

(b) Debt instruments at Fair Value Through OtherComprehensive Income (FVTOCI).

(c) Debt instruments, derivatives and equityinstruments at Fair Value Through Profit orLoss (FVTPL).

(d) Equity instruments measured at Fair ValueThrough Other Comprehensive Income(FVTOCI).

(a) A ‘debt instrument’ is measured at theamortized cost, if both the following conditionsare met:

(i) The asset is held within a business modelwhose objective is to hold assets forcollecting contractual cash flows; and

(ii) Contractual terms of the asset give riseon specified dates to cash flows that areSolely Payments of Principal and Interest(SPPI) on the principal amountoutstanding.

After initial measurement, such financialassets are subsequently measured atamortized cost using the EffectiveInterest Rate (EIR) method. Amortizedcost is calculated by taking into accountany discount or premium on acquisitionand fees or costs that are an integralpart of the EIR. The EIR amortization isincluded in finance income in the profitor loss. The losses arising fromimpairment are recognized in the profitor loss. This category generally appliesto trade and other receivables.

(b) A ‘debt instrument’ is classified as FVTOCI, ifboth of the following criteria are met:

(i) The objective of the business model isachieved both by collecting contractualcash flows and selling the financialassets; and

(ii) The asset’s contractual cash flowsrepresent SPPI.

Debt instruments included within theFVTOCI category are measured initiallyas well as at each reporting date at fairvalue. Fair value movements arerecognized in OCI. However, the Companyrecognizes interest income, impairment



losses and foreign exchange gain or lossin the profit or loss. On de-recognition ofthe asset, cumulative gain or losspreviously recognized in OCI isreclassified from the equity to profit orloss. Interest earned whilst holdingFVTOCI debt instrument is reported asinterest income using the EIR method.

(c) FVTPL is a residual category for debtinstruments. Any debt instrument, which doesnot meet the criteria for categorization as atamortized cost or as FVTOCI, is classified as atFVTPL. Debt instruments included within theFVTPL category are measured at fair value withall changes recognized in the profit or loss.

(d) All equity investments in scope of Ind AS 109are measured at fair value. Equity Instrumentswhich are held for trading are classified as atFVTPL. If the Company decides to classify anequity instrument as at FVTOCI, then all fairvalue changes on the instrument, excludingdividends, are recognized in the OCI. Equityinstruments included within the FVTPL categoryare measured at fair value with all changesrecognized in the profit or loss.

Investment in subsidiaries and associate:

Investments in subsidiaries and associate arecarried at cost less provision for impairment, ifany.

(iii) Derecognition of financial assets:

The Company derecognizes a financial asset when andonly when the contractual rights to the cash flows fromthe asset expire, or when it transfers the financialasset and substantially all the risks and rewards ofownership of the asset to another party. Onderecognition of a financial asset in its entirety, thedifference between the asset’s carrying amount andthe sum of the consideration received and receivableand the cumulative gain or loss that had beenrecognized in Other Comprehensive Income andaccumulated in equity is recognized in the Statementof Profit and Loss if such gain or loss would haveotherwise been recognized in the Statement of Profitand Loss on disposal of that financial asset.

(iv) Impairment of financial assets:

The Company applies the expected credit loss modelfor recognizing impairment loss on financial assets.The Company follows ‘simplified approach’ forrecognition of impairment loss allowance. Theapplication of simplified approach does not require the

Company to track changes in credit risk. Rather, itrecognizes impairment loss allowance based onlifetime ECLs at each reporting date, right from itsinitial recognition.

(v) Subsequent measurement of financial liabilities:

All the financial liabilities are subsequently measuredat amortized cost using the effective interest ratemethod or at fair value through profit and loss. Gainsand losses are recognized in profit or loss when theliabilities are derecognized as well as through the EIRamortization process.

(vi) Derecognition of financial liabilities

A financial liability is derecognized when the obligationunder the liability is discharged or cancelled or expires.When an existing financial liability is replaced byanother from the same lender on substantiallydifferent terms, or the terms of an existing liability aresubstantially modified, such on exchange ormodification is treated as the derecognition of theoriginal liability and the recognition of a new liability.The difference in the respective carrying amounts isrecognized in the Statement of Profit and Loss.

2.10 Inventories

Inventories are valued at the lower of cost and net realisablevalue except scrap and by-products which are valued at netrealisable value. Costs comprises as follow:

(i) Raw materials, Packing Materials, Store andSpares: Cost includes cost of purchase and othercosts incurred in bringing the inventories to theirpresent location and condition. Cost is determined onweighted average basis.

(ii) Finished goods and work in progress: Cost includescost of direct materials and labour and a proportionof manufacturing overheads based on the normaloperating capacity but excluding borrowing costs. Costis determined on weighted average basis. In pursuanceof IND AS-2 indirect production overheads (estimatedby the Management) are allocated for ascertainmentof cost of finished goods and work in progress.

(iii) Net realisable value is the estimated selling price inthe ordinary course of business, less estimated costsof completion and the estimated costs necessary tomake the sale.

(iv) Obsolete inventories are identified and written downto net realisable value. Slow moving and defectiveinventories are identified and provision for the sameis made. Inventories are valued on lower of cost ornet realizable value.




50

2.11 Retirement Benefits

Company follows IND AS-19 as detailed below: -

(a) Short-term benefits are recognized as expense at theundiscounted amount in the Statement of Profit andLoss of the year in which the related service isrendered.

(b) Company provides bonus to eligible employees as perthe Bonus Act,1965 and accordingly liability is providedon actual cost at the end of the year.

(c) Provident Fund: The eligible employees of the Companyare entitled to receive benefits under the ProvidentFund, a defined contribution plan in which bothemployees and the Company make monthlycontributions at a specified percentage of the coveredemployee’s salary. The contributions as specified underthe law are paid to the respective Regional ProvidentFund Commissioner and the Central Provident Fundunder the State Pension Scheme.

(d) The Company has an obligation towards gratuity adefined benefit retirement plan covering all employees.The plan provides for a lumpsum payment toemployees at retirement/determination of service onthe basis of 15 days terminal salary for eachcompleted year of service subject to maximum amountof ` 20 Lacs.

Company’s liability towards gratuity and compensatedabsences is determined using the projected unit creditmethod, with actuarial valuations being carried out atthe end of each annual reporting period.Remeasurement, comprising actuarial gains andlosses, the effect of the changes to the plan assets(excluding net interest), is reflected immediately in theBalance Sheet with a charge or credit recognized inOther Comprehensive Income (OCI) in the period inwhich they occur. Remeasurement recognized in theOther Comprehensive Income is reflected immediatelyin retained earnings and is not reclassified to profit orloss. Past service cost is recognized in profit or loss inthe period of a plan amendment. Net interest iscalculated by applying the discount rate at thebeginning of the period to the defined benefit liabilityor asset.

Defined benefit costs are categorized as follows:

• Service cost (including current service cost,past service cost as well as gains and losseson curtailments and settlements);

• Net interest expense or income; and

• Remeasurement

2.12 Revenue Recognition

Revenue is recognized as per Ind AS 115 “Revenue fromcontract with customers”. Revenue from contract withcustomers is recognized when control of promised goodsand services are transferred to customers at an amountthat reflects the consideration which the company expectsto receive in exchange for those goods.

(a) Sale of goods and rendering of services: Revenue fromsale of goods and rendering of services includingexport benefits thereon are recognized at the point intime when control of goods or services is transferredto the customer which is usually on dispatch / deliveryof goods or services, based on contracts with thecustomers.

(b) Sales include goods sold by contract manufacturersunit (CMU) on behalf of the Company, since risk andreward belong to the Company in accordance with theterms of the relevant contract manufacturingagreements, the related cost of sales is alsorecognized by the Company, as and when incurred bythe CMU.

(c) Sales through State Corporation: Revenue isrecognized at the time of dispatch/delivery to theCorporation as significant risk & rewards associatedwith ownership are transferred to the Corporationalong with the transfer of the property in goods. TheCompany has complete physical control over the goodsand the liquor manufacturer does not have any rightto take back or have lien on such goods.

(d) Interest Income is recorded on time proportion basisusing the effective rate of Interest (EIR).

(e) Rent: Rental Income is accounted on accrual basis.

(f) Interest on Income Tax refunds, Insurance claims,Export benefits and other refunds are accounted foras and when amounts receivable can be reasonablydetermined as being acceptable to authorities.

(g) Royalty income is accounted on an accrual basis inaccordance with terms specified in the relevantagreements.

(h) Income from franchisees business: Company hasentered into supply agreement with few parties. Underthe agreement, parties manufacture at their own costunder supervision of the company and sell the sameto retailers (Licensees) on behalf of the company.Revenue is recognised net of cost of goods sold.

2.13 Manufacturing policy

The main raw material of the Company is ENA, which is usedto produce Indian Made Foreign Liquor (IMFL) and CountryLiquor (CL). Manufacturing policy of the Indian alcoholic spirit



market is highly regulated by the States who control thealcoholic beverage industry. The Indian liquor industry hasbeen experiencing challenges such as state policies withrespect to import & export from one state to the other,production constraints with respect to the pack sizes andtype of packaging, price control and increasing state levies& duties.

2.14 Taxation:

Current income tax

Current income tax assets and liabilities are measured atthe amount expected to be recovered from or paid to thetaxation authorities. The tax rates and tax laws used tocompute the amount are those that are enacted orsubstantively enacted, at the reporting date. Current incometax relating to items recognised outside profit or loss isrecognised outside profit or loss (either in OtherComprehensive Income or in equity). Current tax items arerecognised in correlation to the underlying transaction eitherin OCI or directly in equity. Management periodically evaluatespositions taken in the tax returns with respect to situationsin which applicable tax regulations are subject tointerpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method ontemporary differences between the tax bases of assets andliabilities and their carrying amounts for financial reportingpurposes at the reporting date. Deferred tax liabilities arerecognised for all taxable temporary differences, except whenit is probable that the temporary differences will not reversein the foreseeable future. Deferred tax assets are recognisedfor all deductible temporary differences, the carry forwardof unused tax credits and any unused tax losses. Deferredtax assets are recognised to the extent that it is probablethat taxable profit will be available against which the deductibletemporary differences, and the carry forward of unused taxcredits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed ateach reporting date and reduced to the extent that it is nolonger probable that sufficient taxable profit will be availableto allow all or part of the deferred tax asset to be utilised.Unrecognised deferred tax assets are re-assessed at eachreporting date and are recognised to the extent that it hasbecome probable that future taxable profits will allow thedeferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the taxrates that are expected to apply in the year when the assetis realized or the liability is settled, based on tax rates (andtax laws) that have been enacted or substantively enacted atthe reporting date.

Deferred tax relating to items recognised outside profit or

loss is recognised outside profit or loss (either in OtherComprehensive Income or in equity). Deferred tax items arerecognised in correlation to the underlying transaction eitherin OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if alegally enforceable right exists to set off current tax assetsagainst current tax liabilities and the deferred taxes relateto the same taxable entity and the same taxation authority.

GST paid on acquisition of assets or on incurring expenses:

Expenses and assets are recognised net of the amount ofGST paid, except:

When the tax incurred on a purchase of assets or servicesis not recoverable from the taxation authority, in which case,the tax paid is recognised as part of the cost of acquisition ofthe asset or as part of the expense item, as applicable.

When receivables and payables are stated with the amountof tax included, the net amount of tax recoverable from, orpayable to, the taxation authority is included as part ofreceivables or payables in the balance sheet.

Minimum Alternate Tax

Minimum Alternate Tax (MAT) paid in accordance with thetax laws, which gives future economic benefits in the form ofadjustment to future income tax liability, is considered as anasset if there is convincing evidence that the Company willpay normal income tax. Accordingly, MAT is recognised asan asset in the Balance Sheet when it is probable that futureeconomic benefit associated with it will flow to the Company.

2.15 Borrowing Costs:

Borrowing costs directly attributable to the acquisition,construction or production of an asset that necessarily takesa substantial period of time to get ready for its intended useor sale are capitalised as part of the cost of the asset. Allother borrowing costs are expensed in the period in whichthey occur. Borrowing costs consist of interest and othercosts that an entity incurs in connection with the borrowingof funds. Borrowing cost also includes exchange differencesto the extent regarded as an adjustment to the borrowingcosts.

2.16 Foreign Currency Transactions:

Foreign Currency Transactions involving export sales arerecorded in the reporting currency, by applying to the foreigncurrency amount the exchange rate between the reportingcurrency and the foreign currency on the customs rate onthe date of dispatch of goods. The difference between therates recorded and the rates on the date of actual realizationis transferred to difference in exchange fluctuation account.At the year end, the balances are converted at the year endrate and difference if any between the book balance andconverted amount are transferred to the exchange




52

fluctuation account. The premium or discount arising at theinception of a forward exchange contract is amortized asexpenses / income over the life of the contract. Any profit orloss arising on cancellation or renewal of such a forwardcontract is recognized as income / expenses for the period.Non-monetary items that are measured in historical cost ina foreign currency are not retranslated.

2.17 Provisions:

Provisions are recognized when the Company has a presentobligation (legal or constructive) as a result of a past event, itis probable that an outflow of resources embodying economicbenefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. Whenthe Company expects some or all of the provisions to bereimbursed, the reimbursement is recognized as a separateasset, but only when the reimbursement is virtually certain.The expense relating to a provision is presented in theStatement of Profit and Loss, net of any reimbursement.

If the effect of the time value of money is material, provisionsare discounted using a current pre-tax rate that reflects,when appropriate, the risks specific to the liability. Whendiscounting is used, the increase in the provision due to thepassage of time is recognized as a finance cost.

2.18 Earning Per Share:

The Company presents basic and diluted Earning Per Share(“EPS”) data for its equity shares. Basic EPS is calculated bydividing the profit and loss attributable to equity shareholdersof the Company by the weighted average number of equityshares outstanding during the period. Diluted EPS isdetermined by adjusting the profit and loss attributable toequity shareholders and the weighted average number ofequity shares outstanding for the effects of all dilutive potentialequity shares.

2.19 Segment Reporting:

(a) Segment assets and liabilities:

All Segment assets and liabil ities are directlyattributable to the segment. Segment assets includeall operating assets used by the segment and consistprincipally of PPE, inventories, trade receivable,financial assets and operating cash and bank balances.Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves andsurplus, borrowings, and income tax (both current anddeferred).

(b) Segment revenue and expenses:

Segment revenue and expenses are directlyattributable to segment. It does not include interestincome on inter-corporate deposits, interest expenseand income tax.

Revenue, expenses, assets and liabilities which relateto the Company as a whole and are not allocable tosegments on reasonable basis have been includedunder “unallocated revenue/expenses/assets/liabilities”.

2.20 Cash Flow Statement:

Cash flows are reported using indirect method as set out inInd AS -7 “Statement of Cash Flows”, whereby profit / (loss)before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or futurecash receipts or payments. The cash flows from operating,investing and financing activities of the Company aresegregated based on the available information.

2.21 Leases:

The Company as a lessee

The Company’s lease asset classes primarily consist of leasesfor buildings. The Company assesses whether a contractcontains a lease, at inception of a contract. A contract is, orcontains, a lease if the contract conveys the right to controlthe use of an identified asset for a period of time in exchangefor consideration. To assess whether a contract conveys theright to control the use of an identified asset, the Companyassesses whether:

(a) the contract involves the use of an identified asset.

(b) the Company has substantially all of the economicbenefits from use of the asset through the period ofthe lease and

(c) the Company has the right to direct the use of theasset.

At the date of commencement of the lease, the Companyrecognizes a right-of-use (ROU) asset and a correspondinglease liability for all lease arrangements in which it is a lessee,except for leases with a term of 12 months or less (short-term leases) renewable every year and low value leases. Forthese short-term and low-value leases, the Companyrecognizes the lease payments as an operating expense ona straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extendor terminate the lease before the end of the lease term. ROUassets and lease liabilities includes these options when it isreasonably certain that they will be exercised.

The ROU assets are initially recognized at cost, whichcomprises the initial amount of the lease liability adjusted forany lease payments made at or prior to the commencementdate of the lease plus any initial direct costs less any leaseincentives. They are subsequently measured at cost lessaccumulated depreciation and impairment losses.

ROU assets are depreciated from the commencement date



on a straight-line basis over the shorter of the lease termand useful life of the underlying asset. ROU assets areevaluated for recoverability whenever events or changes incircumstances indicate that their carrying amounts may notbe recoverable. For the purpose of impairment testing, therecoverable amount (i.e. the higher of the fair value less costto sell and the value-in-use) is determined on an individualasset basis unless the asset does not generate cash flowsthat are largely independent of those from other assets. Insuch cases, the recoverable amount is determined for theCash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost atthe present value of the future lease payments. The leasepayments are discounted using the interest rate implicit inthe lease or, if not readily determinable, using the incrementalborrowing rates in the country of domicile of these leases.Lease liabilities are remeasured with a correspondingadjustment to the related ROU asset if the Company changesits assessment of whether it will exercise an extension or atermination option.

Lease liability and ROU assets have been separatelypresented in the Balance Sheet and lease payments havebeen classified as financing cash flows.

The Company as a lessor

Leases for which the Company is a lessor is classified as afinance or operating lease. Whenever the terms of the leasetransfer substantially all the risks and rewards of ownershipto the lessee, the contract is classified as a finance lease. Allother leases are classified as operating leases.

When the Company is an intermediate lessor, it accountsfor its interests in the head lease and the sublease separately.The sublease is classified as a finance or operating lease byreference to the ROU asset arising from the head lease.

For operating leases, rental income is recognized on astraight line basis over the term of the relevant lease.

Transition

Effective April 1, 2019, the Company adopted Ind AS 116,“Leases” and applied the standard to all lease contracts

existing on April 1, 2019 using the modified retrospectivemethod. Accordingly comparatives for the year ended March,2019 have not been retrospectively adjusted and thereforewill continue to be reported under the accounting policiesincluded as part of our Annual Report for year ended March31, 2019. Consequently, the Company recorded the leaseliability at the present value of the lease payments discountedat the incremental borrowing rate and the ROU asset at itscarrying amount. The Financial effect has been disclosed inNote No 45(ii).

2.22 Contingent liabilities:

A contingent liability is a possible obligation that arises frompast events and whose existence will be confirmed only bythe occurrence or non-occurrence of one or more uncertainfuture events not wholly within the control of the Company;or a present obligation that arises from past events but isnot recognized because it is not probable that an outflow ofresources embodying economic benefits will be required tosettle the obligation; or the amount of the obligation cannotbe measured with sufficient reliability. The Company doesnot recognize a contingent liability but discloses its existencein the standalone Ind AS financial statements.

2.23 Use of estimates and judgements:

The preparation of financial statements requires estimatesand assumptions to be made that affect the reported amountof assets and liabilities on the date of financial statementsand the reported amount of revenues and expenses duringthe reporting period. Difference between the actual resultsand estimates are recognised in the period in which it isknown/materialised.

In particular, information about significant areas of estimation,uncertainty and critical judgments in applying accountingpolicies that have the most significant effect on the amountsrecognized in the financial statements are included in thefollowing notes:

(i) Property, plant and equipments

(ii) Retirement and other employee benefits




54

3A. PROPERTY, PLANT AND EQUIPMENT(` in Lakhs)

Particulars Land Land Building Furniture Plant & Other Vehicles TotalFree Hold Lease Hold & Fixtures Machinery Equipment

(I) Cost/deemed cost

As at March 31, 2018 23,789 3,133 6,180 239 9,054 190 448 43,033

Additions - - 86 26 24 18 154

Disposals - - - - (32) (2) (60) (94)

Transferred to Investment property (224) (224)

Assets classified as held for sale (2,282) (9) (34) (3) (2,328)

As at March 31, 2019 23,789 851 6,257 265 8,788 203 388 40,541

Additions 15 47 6 104 172

Disposals (50) (19) (157) (226)

As at March 31, 2020 23,789 851 6,222 265 8,816 209 335 40,487

(II) Accumulated depreciation

As at March 31, 2018 88 535 55 781 61 217 1,737

Charge for the year 27 261 33 566 34 72 993

Disposals (6) (1) (34) (41)


Assets classified as held for sale (82) (1) (83)

As at March 31, 2019 - 33 796 88 1,230 93 255 2,495


Disposals (2) (19) (138) (159)

As at March 31, 2020 - 43 1,062 114 1,733 126 141 3,219

(III) Net block

As at March 31, 2019 23,789 818 5,461 177 7,558 110 133 38,046

As at March 31, 2020 23,789 808 5,160 151 7,083 83 194 37,268

3B. OTHER INTANGIBLE ASSETS(` in Lakhs)

Particulars PatentTrade Mark


As at March 31, 2019 10

As at March 31, 2020 10


As at March 31, 2018 6

Amortization for the year 2


Amortization for the year 2

As at March 31, 2020 10

(III) Net block


As at March 31, 2020 -



3C. CAPITAL WORK IN PROGRESS(` in Lakhs)

Particulars PatentTrade Mark

As at March 31, 2019 22

As at March 31, 2020 (refer footnote (iv)) 18

3D. RIGHT-OF-USE ASSETS(` in Lakhs)

Particulars As at As atMarch 31, 2020 March 31, 2019

Balance at the beginning of the year - -

Recognised on account of adoption of Ind AS 116 (in respect of building) 53 -

Addition during the year - -

Deletion during the year - -

Amortisation expenses during the year 33 -

20

Footnote(s) :-(i) For details of Property, plant and equipment charged as security of borrowings refer Note 18.(ii) Land at various locations have been revalued as on April 01, 2016 by an independent approved valuer on a fair market value basis.(iii) Estimated amount of capital contracts remaining to be executed is Nil (Previous year : ` 12 Lakhs)(iv) Disposal of building represent reimbursement of renovation expenses on let out property to related party which was capitalised in

earlier year.(v) Some portion of Hamira building has been let out on temporary basis. In absence of specific cost of let out portion, the same has not

been transferred to investment property.(vi) For leasehold land refer note 2.5 regarding Significant Accounting Policy.

4. INVESTMENT PROPERTIES(` in Lakhs)


Gross carrying amount at beginning of the year 2,640 2,407

Tranferred from property, plant and equipment - 224

Additions during the year - 9

Gross carrying amount at end of the year 2,640 2,640

Accumulated depreciation at beginning of the year 803 643


Depreciation charged during the year 47 49

Accumulated depreciation at end of the year 850 803

Net carrying amount 1,790 1,837

Footnote(s):(i) Investment in properties comprises land & building (including allied plant & machinery).(ii) Amounts recognised in profit and loss for investment properties


Rental income (including reimbursement of maintenance expenses) 2,560 2,455

Direct operating expenses from property that generated rental income 512 455

Profit from investment properties before depreciation 2,048 2,000

Depreciation for the year 47 49

Profit from investment properties 2,001 1,951




56

(iii) Contingent rents recognised as income - Nil.

(iv) Company has entered upon lease agreements on different dates for a period of maximum 3 years with varying rents with passage oftime. The lease(s) can be terminated at the option of lessor/lessee with notice period of three months.

(v) Fair value


Investment properties 21,464 21,464

(vi) Estimation of fair value

The company obtained independent valuations for its investment properties on April 01, 2016. The best evidence of fair value iscurrent prices in an active market for similar properties.

All resulting fair value estimates for investment properties are included in level 2. Company is of view that there is no significantchange in fair value as on March 31, 2020 and hence no valuation is done at year end.

(vii) For details of investment property charged as security of borrowings refer note 18 (i).

5. NON-CURRENT INVESTMENTS(` in Lakhs)


(A) Equity instruments (fully paid-up)

(i) Quoted

Milkfood Ltd.

1,350 (Previous year: 1,350) Shares of ` 10 Each fully paid 5 4


4,965 (Previous year: 4,965) shares of ` 2 each fully paid 2 5

(ii) Unquoted

In subsidiary companies

S.R.K. Investments Pvt. Ltd. 1 1

10,000 (Previous year: 10,000) Shares of ` 10 each fully paid

Sea Bird Securities Pvt. Ltd. 1 1

8,000 (Previous Year: 8,000) Shares of ` 10 each fully paid

JIL Trading Pvt. Ltd. 1 1


L.P. Investments Ltd. (refer footnote (iii)) 1,020 1,020

10,201,717 (Previous year: 10,201,717) shares of ` 10 each fully paid

Yoofy Computech Pvt. Ltd. 1 1


Natwar Liquors Private Limited 1 -

10,000 Shares aquired during the year

(iii) Unquoted

In associates

Hyderabad Distilleries & Wineries Pvt. Ltd.


(iv) Unquoted

In others

Mohan Meakin Ltd. (refer footnote (ii))Nil (Previous year: 131,961) shares of ` 5 each fully paid. - 627

Chic Interiors Pvt. Ltd.




(` in Lakhs)


(B) Investment in preference shares (fully paid-up)

(i) Qube Corporation Pvt. Ltd. (refer footnote (ii)) 18 135

1,80,000 (Previous year: 13,50,000) Cumulative Redeemable preference sharesof ` 10 each)

(C) Investment in government securities

6 year National Saving Certificates (lodged with Govt. authorities) 1 1

TOTAL 1,053 1,798

Less: Provisions for diminution in the value of investments in L.P. Investment Ltd. 1,020(refer footnote (iii))

33 1,798

Footnote(s):

(i) Cost of investmentMohan Meakin Ltd. - 39Milkfood Ltd. 1 1Punjab National Bank 4 4

(ii) Company has sold 1,31,961 shares of Mohan Meakin Ltd. @ ` 475/- during the year in the off market as these shares are nottraded on any stock exchange and sold 11.70 Lakhs preference shares of Qube Corporation Pvt. Ltd. for ` 117 Lakhs (at par) togroup entities.

(iii) During the year ended March 31, 2020, provision for diminution in carrying value of investment in LP Investment Ltd. (SubsidiaryCompany) of ` 1020 Lakhs have been made to recognise a permanent decline in assets of Hyderabad Distilleries and Winneries Pvt.Ltd. (HDWPL) in which said subsidiary held the investments.

6. LOANS(` in Lakhs)


Unsecured, considered good :

Loan to subsidiary company 2 1,988

Loan to employees (refer note 39, and footnote (i)) 474 -

Unsecured-Considered Doubtful :

Loan to subsidiary company (refer note 39, and footnote (ii)) 185 -

Loan others (refer footnote(iii)) 315 -

Loan to employee - 10

Less: Provision for doubtful advances (500) (10)

Total 476 1,988

Footnote(s):

(i) Represent recoverable from the senior employees. In absence of stipulations of recovery, the amount is treated as non-currentassets and thus Ind AS 109 is not applicable. It was treated as current asset in the previous year under Note No 12.

(ii) During the year, provision of ` 185 Lakhs has been made against loan given to L P Investment Ltd. (subsidiary company) due toerosion of net worth of said company. It was considered as good in the previous year.

(iii) Represent loan to ex-senior employee of the company. The amount has been provided as a matter of abundant caution. Company ismaking efforts to recover the loan. It was treated as current asset in the previous year under Note No 12.




58

7. OTHER FINANCIAL ASSETS(` in Lakhs)


Unsecured considered good :

Security deposits 363 409

Fixed deposits with bank (refer footnote-(i)) 741 1,104

Margin money accounts (refer footnote(ii)) 109 -

Unsecured considered doubtful :

Security deposits 51 -

Others 65 1

Less: Provision for doubtful deposit and others (116) (1)

Total 1,213 1,513

Footnote(s) :

(i) Includes fixed deposit of Nil (Previous Year : ` 381 Lakhs) pledged with IFCI, ` 686 Lakhs (Previous year : ` 636 Lakhs) with IndusindBank for security against interest payment (Also refer note no 18(i)), ` 43 Lakhs (Previous Year : ` 54 Lakhs) pledged with Govt.Authority as security and ` 6 Lakhs pending reconciliation.

(ii) Towards bank guarantee against statutory obligations.

8. OTHER NON-CURRENT ASSETS(` in Lakhs)


Capital advances - 16

MAT credit (refer footnote (i)) - 968

Balance with revenue authorities (refer footnote (ii)) 78 67

Advances to suppliers (refer footnote (iii)) 350 -

Prepaid expenses 18 110

Others 0 6

Unsecured - considered doubtful

Advances to suppliers 1,584 1,485

Others (refer footnote (iv)) 226 66

Less: Provision for doubtful advances (1,811) (1,551)

Total 445 1,167

Footnote(s):

(i) In absence of convincing evidence of future taxable profit, MAT credit has been written off.

(ii) Deposit with authorities as a precondition for filing appeal against various demands raised.

(iii) It was treated as current asset in the previous year under Note 14.

(iv) Includes ` 37 Lakhs (given in earlier years and provided for) from director of company. It also includes interest free advance of ` 170Lakhs (Previous Year : ` 270 Lakhs treated as current) given in the earlier years. The amount has been provided as a matter ofabundant caution. Company is making efforts to recover the said advance.



9. INVENTORIES(` in Lakhs)


Raw materials [includes in transit of ` 504 Lakhs (Previous Year : ` 757 Lakhs)] 1,485 1,358

Packaging materials [includes in transit of ` Nil (Previous Year : 2 Lakhs)] 243 412

Work-in-Progress 502 436

Finished Goods 1,441 1,158

Stock-in-Trade 19 24

Store and Spares 499 554

Total 4,189 3,942

Footnote(s):

(i) Raw materials and packaging materials are net of provision for obsolete inventory of ` 389 Lakhs (Previous Year : ` 527 Lakhs).

(ii) Non-moving stock of ` 67 Lakhs (Raw Material of ` 24 Lakhs, WIP of ` 9 Lakhs and Finished goods of ` 34 Lakhs) (Previous Year :Nil) against which no provision has been made. Management is of view that these stock will be utilised / disposed off in the financialyear 2020-21. Adjustment, if any, shall be made in the subsequent year.

10. TRADE RECEIVABLES(` in Lakhs)


Unsecured, considered good 2,861 6,581

Doubtful 6,202 4,589

9,063 11,170

Less: Allowance for doubtful debts 6,202 4,589

2,861 6,581

Current 2,861 6,581

Non-current - -

Footnote(s):

(i) No debts are due from directors or other officers of the Company either severally or jointly with any other person. Also, no debts aredue from firms or private companies, in which any director is a partner or a director or a member.

(ii) Net of ` 31 Lakhs of service tax. (refer Note No 25(ii)(b))

11. CASH AND CASH EQUIVALENTS(` in Lakhs)


Cash on hand 26 13

Bank balance on current accounts (refer footnote (i)) 1071 937

Total 1,097 950

Footnote(s):

(i) During the year unidentified non-operative bank balance of ` 2 Lakhs has been written off.

12. CURRENT LOANS(` in Lakhs)


Loan & advances to employees 57 894Refer Note 6(i) and Note 6(iii)Total 57 894




60



Fixed deposits with bank - 19

Security deposit 7 73

Margin money accounts (refer footnote(i)) 7 45

Interest receivable 1 105

Others 61 153

Total 76 395

Footnote(s):

(i) Towards bank guarantee against statutory obligation.

14. OTHER CURRENT ASSETS(` in Lakhs)


Balance with excise/revenue authorities 40 77

Advance tax 275 163

Income tax refund 344 491

Advances to suppliers 114 1,481


Others (refer footnote(i)) 4 38

Total 1,009 2,446

Footnote(s):

(i) Current year figure represent receivable from a group entity and is static for more than 3 years. Management is of the view that theamount will be recovered or adjusted in FY 2020-21.

15. ASSETS CLASSIFIED AS HELD FOR SALE(` in Lakhs)


Fixed Assets held for sale 38 1,938

(Valued at the lower of the estimated net realisable value & carrying amount)

Total 38 1,938

Footnote(s):

(i) (a) Consequent upon receipt of approval from Lessor (UPSIDC) company has recorded sale of Sikandrabad unit (comprising ofleasehod land, building and machinery) for ` 1900 Lakhs in books of account. There is no impact on the profit/(loss) of theCompany as carrying value of the assets (restated on NRV in previous year) equals the sale consideration.

(b) In the financial year 2016-17, assets of Glass division were treated as held for sale due to discontinuity of operations of Glassunit at Sahibabad and accordingly these were valued at lower of estimated net realisable value and carrying amount. During theearlier year, company had entered upon an agreement to develop and sell a part parcel of leasehold land subject to approval ofstatutory/ Local Authorties for disposal of same. The Company has received a sum of ` 4627 Lakhs (Previous Year : 4527Lakhs) towards part performance of agreement. However pending receipt of formal approval from the lessor i.e. statutoryauthority for the transfer of lease hold rights in favour of propsed buyer, the same is treated as advance against assets held forsale (refer note 25). Management is hopeful for obtaining formal approval of the same, within 12 months of the reporting date.



16. SHARE CAPITAL(` in Lakhs)


Authorised

75,000,000 (March 31, 2019: 75,000,000) equity shares of ` 10/- each 7,500 7,500

Issued, subscribed and fully paid up


4,615 4,615

Footnote(s):

(i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

Equity shares Numbers Amounts ( `̀̀̀̀)Issued, subscribed and fully paid up

As at April 1, 2018 46,148,112 461,481,120

Increase/(Decrease) during the year - -

As at March 31, 2019 46,148,112 461,481,120


As at March 31, 2020 46,148,112 461,481,120

(ii) Terms/ rights attached to equity shares

(a) 18,438,112 shares referred to as equity shares are having face value of ` 10/- per share. Each holder of equity shares isentitled to one vote per share and dividend, if declared.

(b) 25,210,000 underlying Equity Shares of ` 10/- each fully paid up ranking pari-passu with existing shares were issued in thename of the Depository, The Bank of New York, representing the Global Depository Receipts (GDR) issue. GDRs do not carryany voting rights until they are converted into equity shares.

(c) 2,500,000 Equity Shares of ` 10/- each held by LPJ Holdings Pvt. Ltd., fully paid up at a premium of ` 20/- per share, as aspecial series with differential rights to dividend and voting, were issued during the financial year 2004-05. These shares haveno right to the dividend and each share carry twenty voting rights as compared to one voting right per existing equity share andwere under the lock-in-period of three years from the date of allotment.

(d) The holders of all the above Equity Shares will be entitled to receive remaining assets of the Company, after distribution of allpreferential amounts in event of liquidation of the Company.

(iii) Details of shareholders holding more than 5% Equity Shares in the Company:

As at March 31, 2020 As at March 31, 2019

Name of the shareholder Numbers Percentage Numbers Percentage

(a) The Bank of New York (the Depository) (footnote (ii) b) 25,210,000 54.63 25,210,000 54.63

(b) LPJ Holdings Pvt. Ltd. [footnote (ii)(a)] 7,418,648 16.08 7,418,648 16.08

(c) LPJ Holdings Pvt. Ltd. [footnote (ii)(c )] 2,500,000 5.42 2,500,000 5.42

17. OTHER EQUITY(` in Lakhs)


(a) Capital redemption reserve 580 580

(b) Securities premium reserve 3,697 3,697

(c) General reserve 2,016 2,016

(d) Retained earning (refer footnote (iv)) (6,263) (1,376)

(e) Other Comprehensive Income (610) (332)

Balance as at the end of reporting period (580) 4,585




62

Footnote(s):

(i) Capital Redemption Reserve:

Capital Redemption Reserve was created pursuant to redemption of preferance shares issued in earlier years. The Capital RedemptionReserve amount may be applied by the company, in paying up unissued share of the Company to be issued to shareholders of theCompany as fully paid bonus shares.

(ii) Securities Premium Reserve

Where the Company issues shares at premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premiumreceived on those shares shall be transferred to “Securities Premium account”. The Company may issue fully paid-up bonus sharesto its members out of balance lying in the Securites Premium Account and the Company can also use this reserve for buy-back ofshares.

(iii) General Reserve

General reserve is created out of profit earned by the company by way of transfer from surplus in the statement of profit & loss. TheCompany can use this reserve for payment for dividend and issue of fully paid up shares.

(iv) Includes revaluation reserve of ` 24,523 Lakhs (Previous Year ` 26,323 Lakhs) related to land situated at Hamira and Behror.

(v) The aggregation/disaggregation of changes in each type of reserve, retained earnings and other comprehensive income are disclosedin Statement of Changes in Equity.

18. BORROWINGS

(A) Non current borrowings(` in Lakhs)


Secured

From banks

Term loan (refer footnote (i)(iv)) 19,441 19,586

From others

Car loans (refer footnote (iii)) 67 -

Unsecured

Term Loans (refer footnote (ii)(iv)) 411

Inter corporate loan from related party - 846

Total 19,919 20,432

(B) Current borrowings(` in Lakhs)


Secured

Working capital loans from banks - 1

Unsecured

Inter corporate loan from related party (refer note no. (v)) 214 -

Total 214 1

Footnote(s):

Nature of Security Terms of Repayment(i) Rupee loan from Indusind Bank amounting to ` 19,552 Lakhs (Previous

Year : ̀ 19,586 Lakhs) net of processing fee of ̀ 374 Lakhs (Previous Year: ` 404 Lakhs) is secured against :-

(a) Office space at 9th and 10th floor, Ashoka Estate, 24 BarakhambaRoad, New Delhi

(b) Land & Building at Plot No 78, Sector 18, Institutional Area, Gurgaon,Haryana.

Repayable by Dec-2033. Rate of Interest is11.75%



Nature of Security Terms of Repayment(c) Lien on fixed deposit of ` 686 Lakhs on exclusive basis. (Refer note

7(i))

` 136. Lakhs (Previous Year Nil) treated as current maturities oflong term borrowings (refer note no. 24)

(ii) Rupee loan from NBFC amounting to ̀ 1,116 Lakhs (Previous Year : ̀ 5,592Lakhs).

The facility was secured by collaterals provided by promoters and otherthird parties.

` 705 Lakhs (Previous Year ` 5592 Lakhs) treated as current maturitiesof long term borrowings (refer note no. 24)

(iii) Car Loans of ` 88 Lakhs (Previous Year : ` 13 Lakhs) are secured byhypothecation of the related cars.

` 21 Lakhs (Previous Year : ` 13 Lakhs) treated as current maturities oflong term borrowings (refer note no. 24)

(iv) Loan from NBFC (Other than car loan) and Indusind Bank are under moratorium till August 2020 due to Covid-19 pandemic.Company is expecting its revised repayment schedule from the said institutions and pending the same the classification of loanin current and non-current is made on the basis of existing repayment schedule.

(v) Includes loan of ` 20 Lakhs from associate company for which terms & conditions have not been stipulated and therefore it istreated as repayable on demand. Provision of interest, if any, will be made on finalisation of the terms. (Also refer note no 35& 39)

19. OTHER FINANCIAL LIABILITIES(` in Lakhs)


Security deposits 3,348 3,647

Total 3,348 3,647

Footnote(s):

(i) Addition/ Deduction represents the securtiy deposit received/ Paid during the year (Net of the fair value adjustments as per IND AS109) from the franchise partners/ contact manufacturers.

20. LEASE LIABILITY(` in Lakhs)


Lease liabilities (ROU) 22 -

(refer Note No 45(ii) & 2.21)Total 22 -

Current 19 -

Non-current 3 -

21. OTHER LONG TERM LIABILITIES(` in Lakhs)


Advance rental income (refer footnote (i)) 324 434

Total 324 434

Footnote(s):

(i) Represent difference in fair value and carrying value of security deposit received.

Repayable by Sep 2021. Rate of Interest is20.70%

Repayable by Mar-2025. Rate of interest 8.25%to 8.75% p.a.




64

22. PROVISIONS

(A) Non current(` in Lakhs)


(a) Provision for employee benefits (refer footnote(i))- Gratuity 1,878 1,649

- Compensated absences 78 171

(b) Provisions for litigations (refer footnote (ii))- Service tax/ Sales tax 422 425

Total 2,378 2,245

(B) Current(` in Lakhs)


Provision for employee benefits (refer footnote (i))- Gratuity 323 266


Total 445 424

Footnote(s):

(i) Gratuity and compensated absences have been determined by actuary in terms of Ind AS 19 and accordingly provided. (fordetail refer note 38).

(ii) Includes provision of service tax of ̀ 353 Lakhs (Previous Year : ̀ 353 Lakhs) demanded by Orissa State Beverages Corporationagainst their liability to Service Tax. The matter is subjudice and adjustment will be made in the year of final decision.

23. TRADE PAYABLES(` in Lakhs)


Total outstanding dues of Micro and Small Enterprises (refer footnote (i)) 32 8

Total outstanding dues of creditors other than Micro & Small Enterprises 6,731 7,349(refer footnote (ii), (iv))Total 6,763 7,357

Footnote(s):

(i) (a) This information regarding Micro and Small Enterprises has been determined to the extent such parties have been identifiedon the basis of information available with the Company. This has been relied upon by the auditors. Company has providedinterest on the balance outstanding of MSME parties in respect of supplies subsequent to the date of registration underMSMED Act. 2006.

(ii) Includes the amount of ` 184 Lakhs being balance of the MSME party prior to the date of its registration under the MSMED Act2006.



(` in Lakhs)

(iii) Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, As at As at2006 March 31, 2020 March 31, 2019The principal amount and the interest due thereon remaining unpaid to any supplieras at the end of the year

- Principal Amount Unpaid 32 8

- Interest due 3 1

The amount of interest paid by the buyer in term of section 16, of the Micro, Smalland Medium Enterprise Development Act, 2006 along with the amounts of the paymentmade to suppliers beyond the appointed day during the year

- Payment made beyond the Appointed date - 12

- Interest paid beyond the Appointed date - -

The amount of interest due and payable for the period of delay in making payment 3 1(which have been paid but beyond the appointed day during the year) but withoutadding the interest specified under Micro, Small and Medium EnterpriseDevelopment Act, 2006.

The amount of interest accrued and remaining unpaid at the end of the year 4 217(refer note 24(ii).

(iv) Includes ` 38 Lakhs (Previous Year : ` 99 Lakhs) representing stale cheques issued in earlier years pending reconciliation. Theamount will be adjusted subsequently after reconciliation.

24. OTHER CURRENT FINANCIAL LIABILITIES(` in Lakhs)


Current maturities of long-term borrowings (refer note 18) 837 6,806

Unclaimed matured deposits (refer footnote (i)) 44 59

Interest accrued but not due 87 150

Interest accrued and due (refer footnote (ii)) 13 235


Employee benefits payable (refer footnote (iv)) 941 819

Expenses payable (refer footnote (iii)) 491 591

Other liabilities 155 162

Total 5,872 11,259

Footnote(s):

(i) Unclaimed Deposits are not required to be transferred to the Investor Education and Protection Fund (IEPF) in terms of section 125of the Companies Act, 2013, as these deposits are unclaimed for less than 7 years from the date of their maturity.

(ii) Includes ` 4 Lakhs (Previous Year : 217 Lakhs) payable to MSME suppliers. During the year, interest of ` 216 Lakhs (provided priorto FY 2018-19) payable to unidentified MSME suppliers no longer required have been written back.

(iii) (a) The provision for bills payable with respect to legal and professional expenses of ` 53 Lakhs have been adjusted against theadvances given in earlier years pending receipt of bills.

(b) Includes ` 71 Lakhs (Previous Year : 71 Lakhs) on account of cash discount payable for earlier years subject to confirmationand reconciliation of account with Orissa State Beverges Corporation Ltd.

(iv) Includes ` 226 Lakhs (Previous Year : ` 159 Lakhs) payable to ex-employees on account of full and final settlement which areoutstandng for more than one year. Management will review the balances in the financial year 2020-21 and pass the necessaryentry if any on completion of the review.




66

25. OTHER CURRENT LIABILITIES(` in Lakhs)


Advances from customers (refer footnote (i)) 1,063 475

Advances received against assets held for sale (refer note 15(i)(b)) 4,627 6,427

Statutory dues (refer footnote (ii)) 1,288 1,052

Other liabilities (refer footnote (iii)) 292 322

Total 7,270 8,276

Footnote(s):

(i) Includes ` 542 Lakhs (including ` 422 Lakhs outstanding more than 365 days) received from customers pending reconciliation. Italso includes a sum of ` 857 Lakhs received from a customer which is adjustable in 60 equal installments of ` 15 Lakhs each w.e.f.July 2020 and being shown as net of receivable of ` 215 Lakhs against supplies to the said customer. The Company is of the viewthat the same is not a deposit within the meaning of Sec 2(31) read with Acceptance of Deposit rules 2014.

(ii) (a) Includes provision of custom duty of ` 303 Lakhs (Previous Year : ` 453 Lakhs) in respect of goods in transit and provision ofexcise duty of ` 265 Lakhs (Previous Year : ` 69 Lakhs) in respect of closing stock of finished goods.

(b) Service tax payable of ̀ 54 Lakhs (representing difference on provision made in respect of royalty income on accrual basis andthe payment made on the actual receipt as certified by the management) included in the previous year figures has beenadjusted by recognition of income of ` 23 Lakhs and the balance amount has been adjusted from the parties account.

(iii) Represent difference in fair value and carrying value of security deposit received.

26. REVENUE FROM OPERATIONS(` in Lakhs)


(a) Sale of products (gross of excise duty) (refer note (i)) 12,683 13,904

(b) Sale of services (Job work) 8,610 8,516

(c) Other operating revenues (refer note (ii)) 872 2,252

(d) Revenue from franchisee business (refer note (iii)) 363 253

Total revenue from operations 22,528 24,925

Footnote(s):(` in Lakhs)


(i) Sale of products comprises

(a) Manufactured goods

Malt & malt extract 3,208 3,137

Processed milk 1,158 1,110

Liquor 7,035 8,602

Other 648 566

12,049 13,415

(b) Traded goods

Petroleum and its products 631 479

Others 3 10

634 489

12,683 13,904



(` in Lakhs)


(ii) Other operating revenues comprises

Royalty (current year income is net of reversal of income 420 1,414of ` 119 Lakhs related to previous year)

Duty drawbacks 17 41

Scrap sales 121 138

Bottling charges income - 244

Miscellaneous income 314 415

872 2,252

(iii) Income from Franchisee business (refer note no 2.12(h))The Company has supply agreement with the Franchisee parties. Under theagreement, Franchisee manufacture the goods and sell the same to retailers . TheRevenue for the same is recognised net of cost of goods sold. The revenue and costof goods sold as detailed hereunder are certified by the management.

Sales from franchisee business 13,201 6,405

Less : Cost of goods sold 12,838 6,152

Net Revenue 363 253

27. OTHER INCOME(` in Lakhs)


Interest income (refer footnote (i)) 122 222

Rental maintenance income 441 417

Rent others 12 21

Rent from investment properties 2,118 2,038

Gain on financial instruments at fair value through profit or loss 473 980

Insurance claims 9 2

Liabilities/provisions no longer required written back (refer footnote (ii)) 1,572 1,132

Misc Income (refer footnote (iii)) 56 -

Profit on sale of Investments - 650

Total 4,803 5,462

Footnote(s):

(i) Includes interest of ` 34 Lakhs (Previous Year : Nil) on income tax refund.

(ii) Includes reversal of interest payable of ` 216 Lakhs (Previous Year : Nil) to MSME Supplier (refer note no 24(ii)).(iii) Includes ` 55 Lakhs (Previous Year : Nil) written back on account of diiferences arising due to reconciliation of trade payable /

receivable balances. The amount of ̀ 55 Lakhs includes statutory liabilities of ̀ 40 Lakhs which in the opinion of the Management arenot payable.

28. COST OF MATERIAL CONSUMED(` in Lakhs)


Opening stock 2,297 2,899

Add: Purchases of raw and packaging materials 8,693 6,391

10,990 9,290

Less : Closing stock 2,118 2,297

Total 8,872 6,993




68

29. PURCHASES OF STOCK-IN-TRADE(` in Lakhs)



Others 5 26

Total 618 478

30. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE(` in Lakhs)


Inventories at the beginning of the year:

Work-in-progress 436 578

Finished goods 1,161 2,413

Stock-in-trade 21 38

1,618 3,029

Inventories at the end of the year:




1,961 1,618

Decrease/(Increase) (343) 1,411

31. EMPLOYEE BENEFIT EXPENSES(` in Lakhs)


Salaries, wages and bonus 4,972 5,819

Gratuity & compensation for Leave 447 423

Contribution to provident, family pension fund 328 336

Contribution to employees’ state insurance 113 134

Staff welfare expenses 134 148

Total 5,994 6,860

32. FINANCE COST(` in Lakhs)


Interest expenses on

Borrowings 3,085 5,511

Security Deposit received (refer footnote (i)) 657 264


Other 258 258

Other borrowing cost (refer footnote (ii)) 207 1,226

Total 4,211 7,259

Footnote(s):

(i) Includes ` 410 Lakhs (Previous Year : Nil) on account of interest paid on security deposit (received in earlier years) at the time of fulland final settlement with parties.

(ii) Includes ` 82 Lakhs (Previous Year : ` 507 Lakhs) towards prepayment of loan.



33. DEPRECIATION AND AMORTISATION EXPENSES(` in Lakhs)


Depreciation of property, plant & equipment 883 993

Depreciation of investment property 47 49

Amortisation of intangible assets 2 2

Amortisation of right-of-use assets 33 -

Total 965 1,044

34. OTHER EXPENSES(` in Lakhs)


Manufacturing expenses:Consumption of Stores and Spare parts 280 308

Power and Fuel 3,104 3,263

Repairs - Buildings 65 92

Plant and machinery 233 220

Excise Duty (refer footnote (i)) 196 (424)

Other expenses 980 1,001

Administrative & Selling expenses:Rent (refer note 45(iii)) 36 108

Rates & Taxes 651 719

Insurance 129 162

Travelling expenses 235 326

Repairs to building 22 22

Other repairs & maintenance 265 224

Bad debts, advances and stock written off 933 192


Provision for inventory for obsolete stock 146 155

Reimbursement of expenses to directors 2 2

Directors’ fee 10 9

Security Expenses 261 195

Forwarding charges 88 119

Advertisement, publicity and sales promotion 1,137 668

Auditor’s remuneration (refer footnote (ii)) 28 46

Legal & professional expenses 477 583

Fair value loss on financial instruments 486 380

Miscellaneous expenses (refer footnote (iii)) 783 976

Total 13,523 10,830

Footnote(s):

(i) Represents the difference between excise duty on valuation of opening and closing inventory of finished goods.




70

(ii) Payment to auditor

(` in Lakhs)


As auditor

For Audit 20 20

For Tax Audit 4 4

For Limited Review 2 2

For Tax representation - 19

Out of Pocket Expenses 2 1

28 46

(iii) Miscellaneous Expenses include :

(a) tax paid on perquisite of senior employee ` 24 Lakhs (Previous Year : ` 29 Lakhs).

(b) ` 84 Lakhs on account of reversal of income of bottling charges related to previous year on full and final settlement,

(c) Demmurage charges of ` 90 Lakhs (Previous Year : NIL) and

(d) Advance written off of ̀ 30 Lakhs (Previous Year : NIL) on account of non fulfillment of contractual obligations in respect of newproducts.

35. EXCEPTIONAL ITEMS (INCOME)(` in Lakhs)


Loan no longer required (refer footnote (i)) 4,000 -

Profit on sale of property, plant and equipment 111 373

Provision for diminution in value of investment (refer note (5)(iii)) (1,020) -

Provision for doubtful loan (refer note (6)(ii)) (185) -

Prior period items (refer footnote (ii)) (38)

Total 2,868 373

Footnote(s):

(i) Represent write back of loan from associate company as not payable as confirmed by the associate company.

(ii) In view of the non materiality of the amount of the prior period items having regard to the scale of operations of the entity, there is noneed to restate the corresponding comparitive figures.

36. EARNINGS PER SHARE (EPS)(` in Lakhs)


Net Profit/(Loss) attributable to shareholders (`̀̀̀̀ in Lakhs)

From continuing operations (4,826) (6,472)

From discontinued operations (61) (116)

Total (4,887) (6,588)

Weighted average number of equity shares in issue (Nos) 43,648,112* 43,648,112*

Basic / Diluted earnings per share of `̀̀̀̀ 10 each (`̀̀̀̀)

From continuing operations (11.06) (14.83)

From discontinued operations (0.14) (0.26)

Total basic and diluted earnings per share (11.20) (15.09)



Footnote(s):

(i) The Company does not have any outstanding dilutive potential equity shares. Consequently the basic and diluted earning per share ofthe Company remain the same.

* The preferential allotment of 2,500,000 equity shares, having no right to dividend has not been considered in the above computationof EPS (Refer footnote 16 (ii)c)).

37. CONTINGENT LIABILITIES:(` in Lakhs)

As at As atMarch 31, 2020 March 31, 2019

(a) Claim against the company not acknowledged as debt :

Service tax (footnote (i)) 389 389

Sales tax /VAT (footnote (ii)) 1,296 562

Employee state insurance/others (footnote (iii)) 214 175

Others (footnote (iv)) 22 22

Total 1,921 1,148

Footnote(s) :

(i) Service tax

(a) Demand of service tax and penalty in respect of wrong availment of service tax Cenvat Credit ` 247 Lakhs (Previous year `247 Lakhs). Against this, the company has made an application under SABKA VISHWAS (LEGACY DISPUTE RESOLUTION)SCHEME, 2019 and response of competent authority is awaited.

(b) Demand of service tax “under service of supply of tangible goods” ` 124 Lakhs ( Previous year ` 124 Lakhs).

(c) Demand of service tax and penalty “under management, maintenance and repair services” ` 18 Lakhs ( Previous year ` 18Lakhs).

(ii) Sales tax / VAT

(a) Demand of sales tax under Central Sales Tax Act on account of incomplete/non submission of sales tax forms ` 4 Lakhs(Previous Year : ` 45 Lakhs)

(b) Demand of sales tax & penalty under Telangana VAT Act on account of VAT on royalty ` 103 Lakhs (Previous year ` 103Lakhs).

(c) Demand of sales Tax & penalty under Punjab VAT Act on account of input VAT credit denied on rice husk ̀ 220 Lakhs (Previousyear ` 220 Lakhs).

(d) Demand of sales tax under Haryana VAT Act on account of disallowance of credit of excess VAT deposited due to rate difference` 40 Lakhs (Previous year ` 40 Lakhs.)

(e) Demand of sales tax under Ranchi VAT Act Assessment for FY 2013-14 ` 20 Lakhs (Previous year ` 20 Lakhs )

(f) Demand for disallowance of ITC on purchase of rice flour ` 108 Lakhs (Previous year ` 108 Lakhs)

(g) Demand of sales tax under Ranchi VAT Act Assessment for FY 2014-15 ` 4 Lakhs (Previous year : 4 Lakhs)

(h) Demand of sales tax under Andhra Pradesh VAT Act Assessment for FY 2012-13 ` Nil (Previous year ` 22 Lakhs).

(i) During the year company has received a demand notice of ` 2042 Lakhs (due to non credit of deposited challans) fromCommercial taxes department,Rajasthan. Company has submitted challans of ` 2042 Lakhs and other required documents.However department has not given credit of ̀ 797 Lakhs. Management is hopeful that entire demand will be cancelled shortly.

(iii) Employee state insurance/employee related

(a) Claim in respect of case filed by ESI Corporation ` 6 Lakhs (Previous year ` 6 Lakhs)

(b) Employees related claims ` 208 Lakhs (Previous year ` 169 Lakhs)

(iv) Others

(a) Claim by Punjab Government in respect of amount paid to Mahalaxmi Sugar Mills pending before the ‘The Court of Civil Judge(Senior Division ), Kapurthala’ ` 22 Lakhs (Previous year ` 22 Lakhs).




72

(b) There are certain claims against the Company relating to usage of trade mark etc., which have not been acknowledged asdebts. The quantum and outcome of such claims is not ascertainable at this stage.

(v) Certain matters relating to various assessment years of Income Tax are pending at the various levels of tax authorities and HighCourt. The financial impact, if any, on the outcome of these matters is not determinable at this stage.

(vi) The Company is contesting these demands (stated in footnote (i) to (v)) and the management, based on advise of its advisors,believes that its position will likely be upheld in the appellate process. No expense has been accrued in the standalone financialstatements for these demands raised. The management believes that the ultimate outcome of these proceedings will not have amaterial adverse effect on the Company’s financial position and results of operations. The Company does not expect anyreimbursements in respect of the above contingent liabilities.

(vii) In addition, the Company is subject to legal proceedings and claims, which have arisen in the ordinary course of business. TheCompany’s management reasonably does not expect that these legal actions, when ultimately concluded and determined, will havematerial effect on the Company’s results of operations or financial condition.

38. EMPLOYEE BENEFITS

The Company has classified various employee benefits as under:

(A) Defined contribution plans

During the year, the Company has recognised the following amounts in the statement of profit and loss:

(` in Lakhs)


(i) Employers’ contribution to provident fund 328 336

(ii) Employers’ contribution to employees’ state insurance 113 134

Included in ‘Contribution to Provident, Family Pension and ‘Employees’ State Insurance (Refer Note 30)

(B) Defined benefit plans

The Company operates two defined benefit plans i.e., gratuity and compensated absence for its employees. Under the gratuity plan,every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn salary for eachcompleted year of service.

The following table summarises the components of net benefit expenses and the provision status for respective plans:

Year ended March 31, 2020 Year ended March 31, 2019

Compensated Gratuity Compensated Gratuityabsence absence

(i) Assumptions

(a) Discount rate 6.74% 6.74% 7.60% 7.60%

(b) Rate of increase in compensation levels 10% 10% 5% 5%

(c) Rate of return of plan assets N.A. N.A. N.A. N.A.

(d) Expected average remaining working lives 12.55 15.04 12.90 12.90of employees (in years)

(ii) Change in the Present Value of Obligation (` in Lakhs)

(a) Present value of obligation as at biginning 329 1,915 451 1,769of the year*

(b) Interest cost 24 136 32 122

(c) Current/Past service cost 37 127 71 334

(d) Benefit paid (35) (255) (88) (370)

(e) Actuarial (gain)/loss on obligations (155) 278 (137) 60

(f) Present value of obligation as at end of the year 200 2,201 329 1915



(` in Lakhs)



(iii) Amount recognised in the Balance Sheet

(a) Present value of obligation as at end of the year 200 2,201 329 1,915

(b) Fair Value of Plan Assets as at the year end - - - -

(c) (Asset) / Liability recognised in the Balance 200 2,201 329 1,915Sheet

Net liabilities recognised in the Balance Sheetaccounted for as below:

Provision non current (Refer Note 22 A) 78 1,878 171 1,649

Provision current (Refer Note 22 B) 122 323 158 266

(iv) Expenses recognised in the Statement of Profitand Loss

(a) Under Profit & Loss

Current/Past service cost 37 127 71 334

Interest cost 24 136 32 123

Acturial (gain)/loss on obligations (155) - (137) -

(94) 263 (34) 457

(b) Remeasurement-other comprehensive - 278 - 60Income (OCI)

(c) Total Expenses recognised in the Statement (94) 541 (34) 517of Profit and Loss

(v) Sensitivity analysis:(` in Lakhs)

For the year ended March 31, 2020

Compensated absence Gratuity

1% increase 1% decrease 1% increase 1% decrease

Discount rate (4) 5 (101) 111

Salary increase rate 4 (4) 110 (102)

Employee attrition rate 0 (0) 3 (3)


1% increase 1% decrease 1% increase 1% decreaseDiscount rate (11) 12 (88) 98


Employee turnover 2 (3) 12 (14)

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation asa result of reasonable change in key assumptions occurring at the end of the reporting period.




74

39. RELATED PARTY DISCLOSURES

In accordance with the requirements of “IND-AS 24” on the Related Party Disclosures, the transactions and Related Parties with whomtransactions have taken place during the year are as follows:

(A) Detail of related parties with whom the Company had transaction during the year.

Description of relationship Names of related partiesSubsidiary Companies JIL Trading Pvt. Ltd.

S.R.K. Investments Pvt. LtdSea Bird Securities Pvt. Ltd.Natwar Liquors Pvt. Ltd.L.P. Investments Ltd.Yoofy Computech Pvt. Ltd

Associates Hyderabad Distilleries & Wineries Pvt. Ltd.

Key Management Personnel and their relatives: Mr. Ravi Manchanda (Managing Director)Mr. Anil Vanjani (CEO w.e.f. 21.10.2019)Mr. Anil Girotra (CFO)Mr. Kewal Krishan Kohli(Sr. Vice President & Company Secretary retired w.e.f. 15.07.2019)Mr Roopesh Kumar (Company Secretary w.e.f. 15.07.19)Mr. Karamjit Singh JaiswalMs. Roshni Sanah Jaiswal

Director Mrs. Kiran Indra KapurMrs. Anjali VarmaMs. Sonya JaiswalMrs. Sushma SagarMrs. Asha Saxena

Enterprises over which Major shareholders, Milkfood Ltd.Key Management Personnel and their relatives Fast Buck Investments & Trading Pvt. Ltd.have significant influence / control : Corporate Facility Management

Galaxy Pet Packaging Pvt. Ltd.Quick Return Investments Company Ltd.Double Durable Investments Ltd.Devyani Construction Pvt. Ltd.

(B) Details of transactions carried out with the related parties in the ordinary course of business:

(` in Lakhs)


(i) Subsidiary Companies

JIL Trading Pvt. Ltd.

Expenses of JIL Incurred by JIL Trading Pvt Ltd 10 12

Advance Given 9 -

Expenses incurred on behalf of JIL Trading Pvt Ltd 2 -

Payment agst Old Outstanding 4 -

S.R.K. Investments Pvt. Ltd.

Refund of advance 1,803 1,175

Reimbursement of payments made on behalf of company - 1

(ii) Associates


Payments made on behalf of Associate 7 70



(` in Lakhs)


Repayment of loan by Associate on behalf of company 3,071 -

Loan taken 601 957

Repayment of loan to HDWPL 492 375

Loan written back (refer Note No. 35(i)) 4,000 113

Interest received (net of TDS) - 30

Other receivable amount received - 565

(iii) Key Management Personnel, director and their relatives:

(a) Mr. Ravi Manchanda

Managerial remuneration 36 38

Refund of advance 13 2

(b) Mr Anil Vanjani

Managerial remuneration 61 -

Advance given 1 -

(c) Mr. Anil Girotra



(d) Mr. Kewal Krishan Kohli


Refund of advance - 1

(e) Ms. Roshni Sanah Jaiswal


Advance given 25 94


Interest receivable on advance 18 18

Payment on behalf of Company 53 7

(f) Mr. Karamjit Singh Jaiswal

Remuneration 60 194


(g) Mr. Roopesh Kumar


(h) Mrs Kiran Indira Kapur

Sitting fee paid 2 2

(i) Mrs Anjali Varma


(j) Ms Sonya Jaiswal


(k) Mrs Sushma Sagar


(l) Mrs Asha Saxena


(iv) Enterprises over which Major shareholders, Key Management Personneland their relatives have significant influence / control :

(a) Milkfood Ltd.

Reimbursement of payments made on behalf of company 16 12

Advance recd agst building renovation & rent 100 -




76

(` in Lakhs)


Rental income 41 22

Decapitalisation of building rennovation amount capitalised 59 -in earlier year (including GST)

Interest paid - 4

Purchase/services received 12 69

Loan & advance received - 55

Refund of loan & advance - 48

(b) Corporate Facilities Management

Maintenance charges paid 215 197

(c) Galaxy Pet Packaging Pvt. Ltd.

Loan taken 6 -

Sale of investment in Pref. Share (refer Note No 5(ii)) 18 -

Interest paid 1 -

(d) Quick Return Investment Company Ltd.

Loan taken 182 -

Repayment of loan 14


Interest paid 15 -

(e) Double Durable Investments Ltd.

Loan taken 8 -

Repayment of loan 2 -


Interest paid 1 -

(f) Devayani Construction Pvt. Ltd.

Loan taken 500 -


Interest paid 26 -

(C) Outstanding balance as at end of the year

(` in Lakhs)


(i) Subsidiary Companies

(a) JIL Trading Pvt. Ltd.

Receivable/(Payable) 1 (4)

(b) S.R.K. Investments Pvt. Ltd

Receivable (0) 1,803

(c) L.P. Investments Ltd.

Receivable (refer footnote (iii)) 185 185

(ii) Associates


Inter corporate loan (20) (847)

(iii) Key Management Personnel and their relatives:

Mr. Ravi Manchanda

Receivable 26 40



(` in Lakhs)


Mr. Anil Vanjani

Receivable 1 -

Mr. Anil Girotra

Receivable 239 251

Mr. Karamjit Singh Jaiswal/Mrs. Shakun Jaiswal

Receivable/(Payable) (20) 1

Ms. Roshni Sanah Jaiswal

Receivable 213 227

(iv) Enterprises over which major Shareholders, Key Management Personneland their relatives have significant influence / Control

Milkfood Ltd.

Receivable/(Payable) (35) (44)

Fast Buck Investments & Trading Pvt. Ltd.


Galaxy Pet Packaging Pvt. Ltd.

Receivable/(Payable) (6) -

Quick Return Investments Company Ltd.


Double Durable Investments Ltd.


Devyani Construction Pvt. Ltd.


Footnote(s) :

(i) Related parties have been identified by the management.

(ii) Key Management Personnel remuneration does not include provision for gratuity and compensated absences which is determindfor the Company as whole.

(iii) The company has made provision against loan of ` 185 Lakhs given to L P Investment Ltd. and investment of ` 1020 Lakhs inEquity Share of L P Investment Ltd. (refer Note No 5(iii), Note No 6(ii) & Note No 8(iv)).

(iv) Remuneration paid to KMP excludes expenses incurred in the course of performance of duty.

40. SEGMENT INFORMATION

The company’s operating segments are identified on the basis of those components of the group that are evaluated regularly by the ChiefExecutive Officer (the ‘Chief Operating Decision Maker’ as defined in Ind As 108 -’Operating Segments’), in deciding how to allocate resourcesand in assessing performance. These have been identified taking into account nature of products and services, the differing risks andreturns and the internal business reporting systems. The Company’s business segments are as under:

Beverages: Segment includes manufacturing and supply of Bottled Indian Made Foreign Liquor, Country Liquor, Industrial Alcohol andlicensing use of its IMFL brands.

Food: Segment includes manufacturing and supplies of food products and providing services for manufacture of food products.

Others: Segment includes sale of Petroleum products.

The accounting policies adopted for segment reporting are in line with the accounting polcy of the Company with following additional policiesfor segment reporting.

(a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenueand expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as‘Unallocable’.

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets andother assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as ‘Unallocable’.




78

(A) Primary segment information(` in Lakhs)

Beverages Food Others Total

2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19

(i) Segment revenue

Sales, services and other income 8,477 11,210 13,420 13,231 631 484 22,528 24,925

Less : Excise duty (461) (2,499) (461) (2,499)

Inter segment sales — — — — — — — —

Unallocated income — — — — — — — —

Total revenue 8,016 8,711 13,420 13,231 631 484 22,067 22,426

(ii) Segment results

Segment results (4,429) (856) 1,394 961 (5) (7) (3,040) 98

Unallocated expenditure

Other Unallocable Expenditure net (281) (174)of Unallocable Income

Finance cost 4,211 7,259

Profit/(Loss) before exceptional items (6,970) (6,987)

Exceptional items 2,868 373

Profit/ (Loss) before tax (4,102) (6,614)(from continous operations)

Profit/(Loss) from discountining (61) (116)operations

Profit/(Loss) before Tax (4,163) (6,730)

Less: Tax expense: 724 (142)

Profit/ (Loss) after tax (4,887) (6,588)

(iii) Segment assets and liabilities

Segment assets 13,717 19,220 6,711 8,078 — — 20,428 27,298(refer footnote (i) below))Unallocated assets 30,162 36,221

Total assets 50,590 63,519

Segment liabilities 12,380 13,411 4,714 4,019 — — 17,094 17,430

Unallocated liabilities 29,461 36,889

Total liabilities 46,555 54,319

(iv) Other information

Capital expenditure 63 29 7 — — — 70 29

Unallocated capital expenditure 98 114

Total capital expenditure 168 143

Depreciation 341 352 494 505 — — 835 857

Unallocated depreciation 130 187

Total 965 1,044

Non - cash expenditure 4,055 1,830 — — — 4,055 1,830

Other than depreciation — —

Unallocable non cash expenditure — —

Total 4,055 1,830



(B) Secondary segment information(` in Lakhs)

2019-20 2018-19(i) Segment revenue

Within India 21,591 21,964

Outside India 476 462

Total 22,067 22,426

(ii) Other information

Carrying amount of segment assets by location of assets


Outside India - -

Addition to fixed assets/capital work- in- progress

168 143

Footnote(s) :

(i) Segment assets include capital work- in- progress aggregating to ` 18 Lakhs (Previous Year : ` 22 Lakhs). While most assets aredirectly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated tothe segments on a reasonable basis.

(ii) Capital expenditure pertains to additions made to fixed assets/ capital work-in-progress (including capital advances) during the year.

(iii) Unallocated assets includes land, administration building and cash & bank balances etc.

(iv) Unallocated liabilities include interest bearing liabilities and tax provisions and deferred tax liability.

(v) Non cash items includes bad debts, advances and stocks written off, provision for doubtful debts & advances and fixed assets writtenoff.

(vi) Food Segment represents revenue from one customer.

41. The company has discontinued its operation for Packaging Division with effect from April 1, 2014 and Sikandrabad Unit with effect from Sep30, 2018. During the year Sikandrabad Unit has been sold out. The disclosures as required under Indian Accounting Standard - 105 aregiven below.

(` in Lakhs)

For the year ended For the year endedMarch 31, 2020 March 31, 2019

(A) Revenue

Miscellaneous Income 4 21

Interest Income 1 1

Liabilities/provisions no longer required written back 84 7

Total revenue 89 29

(B) Expenses

Employee benefits expenses

Salaries, Wages, Bonus and Gratuity 7 14

Other expenses

Power and fuel - 1

Rates & taxes 13 22

Insurance - 1



Bad Debts, Advances and Stock written off 81

Provision for Doubtful Debts and advances 20

Security Expenses 5

Loss on sale of fixed assets 4




80

(` in Lakhs)



Miscellaneous expenses 21 94

Total expenses 150 145

Profit/(Loss) for the year (A - B) (61) (116)

Less: Tax expense - -


Total Assets 46 2,163

Total Liabilities 4,655 6,557

Cash Flow from discontinuing operations included in above

- Operating activities (105) (3,935)

- Investing activities 100 3,929

- Financing activities - -

42. FAIR VALUE

Fair value measurement:

(i) All the financial assets and financial liabilities of the company are carried at amortised cost except investment. Investment in subsidiariesare carried at cost and other investments are carried at fair value.

(ii) The management assessed that the carrying values of trade and other receivables, deposit, cash and short term deposits, otherassets, borrowings, trade and other payables reasonably approximate their fair values because these instruments have short-termmaturities.

43. CAPITAL MANAGEMENT

For the purpose of the Company’s capital management, capital includes issued equity capital, securities premium and all other equityreserves attributable to the equity shareholders. The primary objective of the Company’s capital management is to ensure that it maintainsa good credit rating and capital ratios in order to support its business and maximise shareholder value.

The Company monitors capital using a gearing ratio, which is net debt divided by total capital. The Company includes within net debt, all non-current and current borrowings reduced by cash and cash equivalents and other bank balances.

(` in Lakhs)


Non-current borrowings 19,919 20,432

Current maturities of non-current borrowings 981 7,250

Current borrowings 214 1

Less: Cash and cash equivalents 1,097 950

Less: Other bank balances 7 64Net debt 20,010 26,669

Equity share capital 4,615 4,615Other equity (580) 4,585

Total capital 4,035 9,200

Gearing ratio 496% 290%

Company aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structurerequirements.There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year.

During the year ended March 31, 2020, and the year ended March 31, 2019, the Company dispossed off/ in the process of disposing itssurplus immovable assets and has infused the fund through associate company to reduce the borrowings and fund operational losses.



44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Company’s principal financial liabilities comprise borrowings, trade and other payables for running the business of the Company.TheCompany’s principal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances andsecurity deposits that are out of regular business operations.

The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management ofthese risks.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate be-cause of changes in marketprices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk.Financial instruments affected by market risk include borrowings, trade payables.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Company’s financial instruments will fluctuatebecause of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rate relatesprimarily to the Company’s borrowings with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on borrowings affected. Withall other variables held constant, the Company’s profit before tax is affected through the impact on floating rate borrowings, asfollows:

(` in Lakhs)

March 31, 2020 March 31, 2019

1% increase 1% decrease 1% increase 1% decreaseImpact on profit before tax (257) 257 (344) 344

ii. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes inforeign exchange rates. There does not seem to be any significant risk as transaction in foreign currency are very few.

As there is no significant foreign currency risk, sensitivity analysis showing impact on profit is not calculated.

iii. Commodity price risk

The Company is affected by the price volatility of certain commodities. The company’s long standing relationships with mostsuppliers ensure steady availability of raw materials at competitive prices.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. TheCompany’s exposure to credit risk arises majorly from loan, advances, trade and other receivables. Other financial assets like securitydeposits and bank deposits are mostly with government authorities and nationalised banks and hence, the Company does not expectany credit risk with respect to these financial assets. With respect to trade receivables, some portion includes dues from stategovernment corporations, risk is limited and considered insignificant by the management. In respect of sale made to other than stategovernment corporation, Company provides expected credit loss on the basis of ageing of trade receivable instead of method of ECLas prescribed in Ind AS 109. Company is exposed to risk of debts, loan and loans of ` 1564 Lakh outstanding over a period of oneyear. Further with regard to advance to subsidiaries & associates, company expects non recovery of ̀ 185 Lakh due to erosion of thenet worth of the subsidiary company.

(c ) Liquidity risk

The Company’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings. Thetable below summarises the maturity profile of the Company’s financial liabilities:




82

(` in Lakhs)

Maturities Total

Upto 1 year 1-2 years 2-3 years Above 3 years

31-Mar-20

Non-current borrowings - 604 314 19,001 19,919

Non-current other financial liabilities 660 2,688 - 3,348

Current borrowings 214 - - - 214

Trade payables 6,763 - - - 6,763

Lease Liabilities 19 3 - - 22

Other financial liabilities 5,872 - - - 5,872

Total 12,868 1,267 3,002 19,001 36,138

31-Mar-19

Non-current borrowings - 196 177 20,059 20,432

Non-current other financial liabilities 1,534 641 1,472 3,647

Current borrowings 1 - - - 1

Trade payables 7,357 - - - 7,357

Other financial liabilities 11,259 - - - 11,259

Total 18,617 1,730 818 21,531 42,696

45. OTHER INFORMATION

(i) In absence of convincing evidence of future taxable profit, the Company has not recognised deferred tax asset during the year.

(ii) With Effect From April 1, 2019, the Company adopted Ind AS 116 “Leases”, applied to all lease contracts existing as on April 1, 2019using the modified method. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted.On transition, the adoption of the new standard resulted in recognition of Right-of-Use asset (ROU) of ̀ 53 Lakhs and a correspondinglease liability of ` 53 Lakhs. The effect of this adoption has increased losses by ` 1 Lakh and reduction of EPS by INR 0.0023 pershare. The Ind AS 116 has not been applied to short-term leases of all assets that have a lease term of 12 months or less and thelease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.

(iii) The outbreak of Covid-19 pandemic is causing significant disturbance and slowdown of economic activities globally. With variousrestrictions imposed and the lockdown announced from March 24, 2020, all the operations and the manufacturing operations cameto stand still during the rest of March 2020. This impacted the performance marginally of the company adversely for the FinancialYear ended March 31, 2020. With the relaxations granted by the Government of State of Punjab, the operations of the distillery andfood division were resumed from April 11, 2020. Further, in view to meet the requirement of the hand santizers due to the increaseddemand of the same on account of the spread of COVID-19, the Company has launched hand sanitizers and accordingly entered intoarrangements with various parties for manufacture/ procurement of hand santizers for sales & distribution against the supply ofthe Denatured Alcohol by the Company. The product of the Company appears to be well accepted in the market as per initial reports.The Company is facing issues in servicing its financial obligations due to the impact of COVID-19. Loan from NBFC and Bank and therepayment of installments of same are under moratorium till August 2020 due to Covid-19 pandemic. The Company is expecting itsrevised repayment schedule from the said institutions. Based on the current indicators of future economic conditions, the managementexpects to recover the carrying amount of the assets, however the management will continue to closely monitor any material changesto future economic conditions. Given the uncertainities, the final impact on Company’s assets in future may differ from that estimatedas at the date of approval of these financial results.

(iv) Internal audit report for the half year ending March 31, 2020 has been received on August 20, 2020. Internal auditor inter alia hasraised certain issues regarding availment of GST input credit in respect of certain matters, payment of GST under the reverse chargemechanism, Providing of documentary support in respect of the some of the sales promotion and marketing expenses, non collectionof TCS on the sale of the vehicle, Application of Sec 2(31) of Companies Act read with Acceptance of Deposits Rules 2014 regardingcertain deposits and advances from customers, Accounting of MGQ income, Non booking of interest income on the late receipt ofRoyalty income, etc,. Management is of the view that it has rightfully claimed the input credits and fully complied with the provisions ofthe GST Act in other areas. However management will take further view in respect of all these matters including taking of the legalopinion and will obtain the compliance certificate from the internal auditor by the end of September 2020.

(v) Previous year figures have been reclassified/regrouped wherever necessary to this year’s classification.



To the Members of Jagatjit Industries Limited

Report on the Consolidated Financial Statements

Qualified Opinion

We have audited the accompanying consolidated financialstatements of Jagatjit Industries Limited (hereinafter referredto as the “Holding Company”), and its subsidiaries (Holding Companyand its subsidiary together referred to as “the Group”) and itsassociate company, which comprise the consolidated balance sheetas at March 31, 2020, the consolidated statement of profit andloss (including Other Comprehensive Income), the consolidatedStatement of Changes in Equity and the consolidated Statement ofCash Flows for the year ended on that date and notes to theconsolidated financial statements including a summary of thesignificant accounting policies and other explanatory information(hereinafter referred to as “the consolidated financial statements”).

In our opinion and to the best of our information and according tothe explanations given to us and based on the consideration ofreports of other auditors on separate financial statements of suchsubsidiaries and associate company as were audited by the otherauditors and except the effects of matter described in the Basisfor Qualified Opinion section of our report, the aforesaidconsolidated financial statements give the information required bythe Companies Act, 2013 as amended (“the Act”) in the mannerso required and give a true and fair view in conformity with theaccounting principles generally accepted in India, of the state ofaffairs of the Group as at March 31, 2020, its loss including othercomprehensive loss, changes in equity and its cash flows for theyear ended on that date.

Basis for qualified opinion

(i) In the opinion of the management, Trade Receivable andLoans & Advances have a value on realization in the ordinarycourse of business, at least equal to the carrying amountin the books.

The Group has a policy of providing for (a) all debtsoutstanding beyond 3 years or (b) where recovery isconsidered doubtful irrespective of the fact that legal actionhas been initiated or not, instead on the method prescribedunder IND AS 109. The Group does not have effectivesystem of obtention of confirmations from TradeReceivables/ Payables (including confirmation of RegisteredMSME Suppliers) and other Advances. The financial impactof this is not ascertainable and to that extent we cannotcomment upon the adequacy of provision for Expected Creditloss/doubtful debts/advances to the suppliers. However,non-moving debts and advances to suppliers outstandingbeyond 1 year are to the extent of ` 1564 Lakhs which isstatic balance for which confirmations and reconciliationsare not available and have not been provided for.

Further, Trade payables, Loan & advance and tradereceivable (other than above) are subject to reconciliation& confirmation. The financial impact of all this is not

ascertainable and to that extent we can not comment uponthe veracity of such balances.

(ii) The Group has written back interest payable of ̀ 216 Lakhs(provided prior to FY 2018-19) to unidentified MSMEsuppliers. Management is of view that these are unidentifiedand a liability no longer required.

(iii) Physical verification of inventories: Due to Covid-19Pandemic lockdown management could not conduct thephysical verification of all inventories at reporting date. It isinformed by the management that physical verification wasconducted subsequently and no material discrepancy wasfound.

We were not able to attend the physical verification aslockdown was effective, therefore, we are unable to verifythe existence/condition of inventories of ` 1485 Lakhsraw material, ̀ 243 Lakhs packing materials, ̀ 501 Lakhswork-in-progress, ̀ 1441 Lakhs finished goods, ̀ 19 Lakhsstock-in-trade and ` 499 Lakhs stores and spares todetermine the adjustments that may be required to bemade in the value of inventory and consequential effectthereof on the consolidated financial statement as on March31, 2020.

We conducted our audit of the consolidated financial statementsin accordance with the Standards on Auditing (SAs) specified undersection 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor’s Responsibilitiesfor the Audit of the Consolidated Financial Statements section ofour report. We are independent of the Group in accordance withthe Code of Ethics issued by the Institute of Chartered Accountantsof India (ICAI) together with the independence requirements thatare relevant to our audit of the consolidated financial statementsunder the provisions of the Act and the Rules made thereunder,and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI’s Code of Ethics. We believethat the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualified opinion on theconsolidated financial statements.

Emphasis of matter:

• We draw attention to Note No. 4(vii) regarding fair value ofinvestment properties, Note No. 6(i)&(ii) regarding loan toemployees & provision for loan to ex-employee, Note No 8(iv)regarding provision for advances to others, Note No 9(ii)regarding non-moving inventories, Note No 11(i) regardingunidentified bank balances written off, Note 14(i) regardingamount receivable from a group company, Note No 15regarding assets held for sale, Note No 18(iv) regardingclassification of loan, Note No 18(v) regarding non stipulationof terms and conditions of loan, Note No. 22(ii) regardingprovision of service tax, Note No. 23(i)&(ii) regarding provisionof interest on outstanding amount of MSME suppliers andclassification of outstanding of MSME supplier as other than

Independent Auditor’s Report

Financial Statements (Consolidated)


84

MSME, Note No 24(iii) regarding adjustment of advances, NoteNo 24(iv) regarding amount payable to ex-employees, NoteNo.25(i) regarding advance from customers, Note No 25(ii)(b)regarding adjustment of service tax payable, Note No 26(iii)regarding income from franchisee business, Note No 27(iii)regarding other income, Note No. 32(i) regarding interest paidon account of full & final settlement, Note No 35(ii) regardingimpairment of Goodwill, Note No 35(iv) regarding advancewritten off, Note No 45(iii) regarding outbreak of COVID-19andNote No. 45(iv) regarding internal audit issues.

• The Group has taken loan of ` 6999 Lakhs from its AssociateCompany (` 5478 Lakhs taken during the year) and vide BoardResolution(s) dated 14.02.2020/20.02.2020 of respectivegroup companies loan amount of ` 6979 Lakhs have beenwritten back (Note 35(i)) as not payable on confirmation ofassociate company and treated as income. This has resultedin reduction of loss of the year by ` 6979 Lakhs.

• Going Concern:

Without qualifying our opinion, we draw attention to Note 2.1(iii) in the consolidated financial statements which indicatesthat the Holding Company has been suffering losses for thelast seven years and the net working capital is negative. Duringthe year March 31, 2020 the Holding Company suffered net

loss of ` 5165 Lakhs. These conditions along with othermatters as set forth in Note 2.1 (iii), indicate the existence ofa material uncertainty that may cast significant doubt aboutthe company’s ability to continue as a going concern. Themanagement has disclosed the mitigating factors vide the saidNote and we have relied upon the same.

• The Internal Audit system of the Holding Company needs tobe substantially strengthened in scope, coverage andcompliance in respect of Hamira Plant and Head Officeoperations.

Our opinion is not qualified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that, in our professionaljudgment, were of most significance in our audit of the consolidatedfinancial statements of the current period. These matters wereaddressed in the context of our audit of the consolidated financialstatements as a whole and in forming our opinion thereon, we donot provide a separate opinion on these matters. In addition to thematter described in the basis of qualified opinion section we havedetermined the matters described below to be the Key Audit Matterto be communicated in our report. For each matter mentionedbelow, our description of how our audit addressed the matter isprovided in that context.


(a) Litigation Matters:

The Group operates in various states within India, exposing it to a varietyof different Central and State Laws, regulations and interpretationsthereof. In this regulatory environment, there is an inherent risk oflitigation and claims.

Consequently, provisions and contingent liability disclosures may arisefrom direct and indirect tax proceeding, legal proceedings includingregulatory and other government / department proceedings, as wellas investigations by authorities and commercial claims.

At March 31, 2020, the Group’s contingent liabilities for legal matterswere ` 1921 Lakhs (refer Note 37 to the consolidated financialstatement) and provision for service tax aggregating to 353 Lakhs(refer Note 22(A)). The most significant contingent liability pertains toservice tax of ` 389 Lakhs and sales tax of ` 1296 Lakhs.

Management applies significant judgment in estimating the likelihoodof the future outcome in each case when considering whether, andhow much, to provide or in determining the required disclosure for thepotential exposure of each matter. This is due to the highly complexnature and magnitude of the legal matters involved along with the factthat resolution of tax and legal proceedings may span over multipleyears, and may involve protracted negotiation or litigation.

These estimates could change substantially overtime as new factsemerge as each legal case progresses.

Given the inherent complexity and magnitude of potential exposuresacross the Group and the judgment necessary to estimate the amountof provisions required or to determine required disclosures, this is akey audit matter.

Reviewing the outstanding litigations against the Group forconsistency with the previous years. Enquire and obtainexplanations for movement during the year.

Discussing the status of significant known actual and potentiallitigations with the Group’s in-house officials and other seniormanagement personnel who have knowledge of thesematters and assessing their responses.

Reading the latest correspondence between the Group andthe various tax/legal authorities and review ofcorrespondence with/legal opinions obtained by themanagement, from external legal advisors, where applicable,for significant matters and considering the same in evaluatingthe appropriateness of the Group’s provisions or disclosureson such matters.

Examining the Group’s legal expenses and reading theminutes of the board meetings, in order to ensure that allcases have been identified.

With respect to tax matters, involving our tax specialists,and discussing with the Group’s tax officers, their views andstrategies on significant cases, as well as the relatedtechnical grounds relating to their conclusions based onapplicable tax laws.

Assessing the decisions and rationale for provisions held orfor decisions not to record provisions or make disclosures.

For those matters where management concluded that noprovisions should be recorded, considered the adequacy andcompleteness of the Group’s disclosures.


Information Other than the Consolidated Financial Statementsand Auditor’s Report Thereon

The Holding Company’s management and Board of Directors areresponsible for the other information. The other informationcomprises the information included in the Holding Company’s annualreport, but does not include the financial statements and ourauditor’s report thereon.

Our opinion on the consolidated financial statements does not coverthe other information and we do not express any form of assuranceconclusion thereon.

In connection with our audit of the consolidated financial statements,our responsibility is to read the other information and, in doing so,consider whether the other information is materially inconsistentwith the consolidated financial statements or our knowledgeobtained during the course of our audit or otherwise appears to bematerially misstated. If, based on the work we have performed, weconclude that there is a material misstatement of this otherinformation, we are required to report that fact. We have nothingto report in this regard.

Responsibilities of Management and Those Charged withGovernance for the Consolidated Financial Statements

The Holding Company’s management and Board of Directors areresponsible for the preparation and presentation of theseconsolidated financial statements in terms of the requirements ofthe Act that give a true and fair view of the consolidated state ofaffairs, consolidated loss and other comprehensive income,consolidated statement of changes in equity and consolidated cash

flows of the Group including its associate in accordance with theIndian Accounting Standard (Ind AS)specified under 133 of the Actand other accounting principles generally accepted in India. Therespective Board of Directors of the companies included in theGroup and of its associates are responsible for maintenance ofadequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of each company and forpreventing and detecting frauds and other irregularities; selectionand application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; anddesign, implementation and maintenance of adequate internalfinancial controls, that were operating effectively for ensuring theaccuracy and completeness of the accounting records, relevant tothe preparation and presentation of the consolidated financialstatements that give a true and fair view and are free from materialmisstatement, whether due to fraud or error, which have beenused for the purpose of preparation of consolidated financialstatements by the Directors of the Holding Company, as aforesaid.

In preparing the consolidated financial statements, respectivemanagement and Board of Directors of the companies included inthe Group and of its associate are responsible for assessing theability of each company to continue as a going concern, disclosing,as applicable, matters related to going concern and using the goingconcern basis of accounting unless management either intends toliquidate the Company or to cease operations, or has no realisticalternative but to do so.

The respective Board of Directors of the companies included inthe Group and of its associate are responsible for overseeing thefinancial reporting process of each company.


(b) Loan to employees:

Group has given loan of ` 474 Lakhs to its senior employees in earlieryears. Stipulation of repayment is not laid out. Management hasrepresented that the amount will be recovered during the course oftime without specifying the time frame.

(c) Revenue recognition from sale of products:

Revenue from sale of products is recognized when control of productshas transferred to the customer and there is no unfulfilled obligationthat could affect the customer’s acceptance of products. Revenue fromthe sale of products is measured at the fair value of the considerationreceived and receivable, net of returns and allowances, discounts andincentives.

Significant judgment is required in estimating provisions relating toallowances, discounts and incentives recognized in relation to salesmade during the year.

Our procedures included:

We have perused the detail and have verified the repaymentsmade by employers during the year.

We have verified balance confirmation.

We have advised the company to specify the time frame forrecovery of the same.

We have disclosed the issue in the emphasis of matterparagraph.

Our audit procedures included, amongst others, assessingthe Group’s revenue recognition accounting policy, includingthose relating to allowances, discounts, and incentives.

We understood, evaluated and tested the operatingeffectiveness of internal controls over recognition of revenue,discounts, and incentives.

We performed test of details, on a sample basis, andinspected the underlying documents relating to sales andprovisions of discounts and incentives.

We tested sales transactions near year end date as well ascredit notes issued after the year end date.

We discussed and evaluated management assessment ofestimates relating to allowances, discounts and incentives.

We assessed the disclosures in the consolidated financialstatements in respect of revenue.



86

Auditor’s Responsibilities for the Audit of the ConsolidatedFinancial Statements

Our objectives are to obtain reasonable assurance about whetherthe consolidated financial statements as a whole are free frommaterial misstatement, whether due to fraud or error, and to issuean auditor’s report that includes our opinion. Reasonable assuranceis a high level of assurance, but is not a guarantee that an auditconducted in accordance with SAs will always detect a materialmisstatement when it exists. Misstatements can arise from fraudor error and are considered material if, individually or in theaggregate, they could reasonably be expected to influence theeconomic decisions of users taken on the basis of theseconsolidated financial statements.

As part of an audit in accordance with SAs, we exercise professionaljudgment and maintain professional skepticism throughout theaudit. We also:

• Identify and assess the risks of material misstatement of theconsolidated financial statements, whether due to fraud orerror, design and perform audit procedures responsive tothose risks, and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud ishigher than for one resulting from error, as fraud may involvecollusion, forgery, intentional omissions, misrepresentations,or the override of internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that areappropriate in the circumstances. Under section 143(3)(i)ofthe Act, we are also responsible for expressing our opinion onwhether the Group has adequate internal financial controlssystem in place and the operating effectiveness of suchcontrols.

• Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and relateddisclosures made by management.

• Conclude on the appropriateness of the Board of Directors’use of the going concern basis of accounting and, based onthe audit evidence obtained, a material uncertainty existsrelating to events or conditions that may cast significant doubton the Holding Company’s ability to continue as a goingconcern. We draw attention on emphasis of matter paragraph(stated above) in our audit report explaining indicator ofexistence of material uncertainty that may cast significantdoubt on the Holding Company’s ability to continue as a goingconcern and mitigation factors given by the management inNote No 2.1(iii) of the consolidated financial statements.

• Evaluate the overall presentation, structure and content ofthe consolidated financial statements, including thedisclosures, and whether the consolidated financial statementsrepresent the underlying transactions and events in a mannerthat achieves fair presentation.

• Obtain sufficient appropriate audit evidence regarding thefinancial information of such entities or business activitieswithin the Group and its associate to express an opinion onthe consolidated financial statements. We are responsible forthe direction, supervision and performance of the audit of

financial information of Holding company included in theconsolidated financial statements of which we are theindependent auditors. For the other entities included in theconsolidated financial statements, which have been auditedby other auditors, such other auditors remain responsible forthe direction, supervision and performance of the auditscarried out by them. We remain solely responsible for ouraudit opinion. Our responsibilities in this regard are furtherdescribed in the ‘Other Matters’ paragraph of this audit report.

We believe that the audit evidence obtained by us along with theconsideration of audit reports of the other auditors referred to inOther Matters paragraph is sufficient and appropriate to provide abasis for qualified audit opinion on the consolidated financialstatements.

We communicate with those charged with governance of theHolding Company included in consolidated financial statements ofwhich we are the independent auditors regarding, among othermatters, the planned scope and timing of the audit and significantaudit findings, including any significant deficiencies in internal controlthat we identify during our audit.

We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regardingindependence, and to communicate with them all relationships andother matters that may reasonably be thought to bear on ourindependence, and where applicable, related safeguards.

From the matters communicated with those charged withgovernance, we determine those matters that were of mostsignificance in the audit of the consolidated financial statements ofthe current period and are therefore the key audit matters. Wedescribe these matters in our auditor’s report unless law orregulation precludes public disclosure about the matter or when,in extremely rare circumstances, we determine that a matter shouldnot be communicated in our report because the adverseconsequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

Other Matters

We did not audit the financial statements of six subsidiaries, whosefinancial statements reflect total assets of ̀ 97 Lakhs as at March31, 2020, total revenues of ` Nil, total net loss of ` 5 Lakhs, totalcomprehensive loss of ` 5 Lakhs for the year ended March 31,2020 and net cash inflows amounting to ` 1 Lakh for the yearended on that date, as considered in the Statements. These financialstatements have been audited by other auditors whose reportshave been furnished to us by the Holding Company’s managementand our opinion on the Statements, in so far as it relates to theamounts and disclosures included in respect of these subsidiaries,is based solely on the audit reports of other auditors.

The Consolidated Financial Statements also include the Group’sshare of net profit (including other comprehensive income) of `477 Lakhs for the year ended March 31, 2020 as considered inthe Statements, in respect of an associate company, whose financialstatements have been audited by other auditors.

Our opinion on the consolidated financial statements, and our reporton Other Legal and Regulatory Requirements as mentioned below,is not modified in respect of the above matters with respect to our


reliance on the work done and the reports of the other auditorsand the financial statements/financial information certified by theHolding Company’s Management.

Report on Other Legal and Regulatory Requirements

1. With respect to matter to be included in the Auditor’s reportunder section 197(16) of the Act:

In our opinion and according to the information andexplanations given to us and based on the reports of thestatutory auditors of such subsidiary companies and associatecompany incorporated in India, the managerial remunerationfor the year ended March 31, 2020 has been paid / providedby the Holding Company, its subsidiaries and associatecompany incorporated in India to their directors in accordancewith the provisions of section 197 read with Schedule V of theAct; and

2. As required by Section 143 (3) of the Act, based on our auditand on the consideration of reports of the other auditors onseparate financial statements of such subsidiaries andassociate as were audited by other auditors, as noted in the‘Other Matters’ paragraph, we report, to the extent applicable,that:

(a) we have sought and obtained all the information andexplanations which to the best of our knowledge and beliefwere necessary for the purposes of our audit of aforesaidconsolidated financial statements;

(b) in our opinion proper books of account as required by lawrelating to preparation of aforesaid consolidation of thefinancial statements have been kept so far as it appearsfrom our examination of those books and reports of theother auditors;

(c) the consolidated balance sheet, the consolidatedstatement of profit and loss including othercomprehensive income, the consolidated statement ofchanges in equity and the consolidated statement of cashflow dealt with by this Report are in agreement with thebooks of account maintained for the purpose ofpreparation of the consolidated financial statements

(d) in our opinion, the aforesaid consolidated financialstatements comply with the Accounting Standardsspecified under Section 133 of the Act.

(e) on the basis of the written representations received fromthe directors of the Holding Company as on 31 March2020 taken on record by the Board of Directors of theholding Company and the report of the statutory auditorof its subsidiaries incorporated in India, none of thedirectors of the Group companies incorporated in Indiais disqualified as on 31 March 2020 from being appointedas a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financialcontrols over financial reporting of the Holding Companyand its subsidiary companies incorporated in India andthe operating effectiveness of such controls, refer to ourseparate report in “Annexure A”; and

(g) with respect to the other matters to be included in theAuditor’s Report in accordance with Rule 11 of theCompanies (Audit and Auditors) Rules, 2014, in ouropinion and to the best of our information and accordingto the explanations given to us and based on theconsideration of the reports of the other auditors onseparate financial statements of the subsidiaries andassociate, as noted in the ‘Other Matters’ paragraph:

i. the Group has disclosed the impact of pendinglitigations on its financial position in its consolidatedfinancial statements;

ii. the Group did not have any long term contractsincluding derivative contracts for which there wereany material foreseeable losses;

iii. there has been no delay in transferring amountswhich were required to be transferred, to theInvestor Education and Protection Fund by the Group.



M. K. MadanPlace: New Delhi ProprietorDate: 03.09.2020 Membership number: 082214UDIN: 20082214AAAACG6832



88

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (‘the Act’)

In conjunction with our audit of the consolidated financial statementsof Jagatjit Industries Limited (hereinafter referred to as “the HoldingCompany”) its subsidiaries (the Holding and its subsidiaries togetherreferred as ‘the Group”) and its associate as of and for the yearended March 31, 2020, we have audited the internal financialcontrols with reference to consolidated financial statements of theHolding Company, its subsidiary companies, and associate company,which are incorporated in India, as of that date.

Management’s Responsibility for Internal Financial Controls

The respective Board of Directors of the Holding Company and itssubsidiaries and associate, which are companies incorporated inIndia, are responsible for establishing and maintaining internalfinancial controls with reference to consolidated financialstatements based on the criteria established by the respectivecompanies considering the essential components of internal controlstated in the Guidance Note. These responsibilities include thedesign, implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring theorderly and efficient conduct of its business, including adherenceto the respective company’s policies, the safeguarding of its assets,the prevention and detection of frauds and errors, the accuracyand completeness of the accounting records, and the timelypreparation of reliable financial information, as required under theCompanies Act, 2013 (hereinafter referred to as “the Act”).

Auditors’ Responsibility

Our responsibility is to express an opinion on the internal financialcontrols with reference to consolidated financial statements basedon our audit. We conducted our audit in accordance with theGuidance Note and the Standards on Auditing, prescribed undersection 143(10) of the Act, to the extent applicable to an audit ofinternal financial controls and, both issued by the Institute ofChartered Accountant of India. Those Standards and the GuidanceNote require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference toconsolidated financial statements were established and maintainedand if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidenceabout the adequacy of the internal financial controls with referenceto consolidated financial statements and their operatingeffectiveness. Our audit of internal financial controls with referenceto consolidated financial statements included obtaining anunderstanding of internal financial controls with reference toconsolidated financial statements, assessing the risk that a materialweakness exists, and testing and evaluating the design andoperating effectiveness of the internal controls based on theassessed risk. The procedures selected depend on the auditor’sjudgment, including the assessment of the risks of material

misstatement of the consolidated financial statements, whetherdue to fraud or error.

We believe that the audit evidence we have obtained and the auditevidence obtained by the other auditors of the relevant subsidiarycompanies and associate company incorporated in India in termsof their reports referred to in the Other Matters paragraph below,is sufficient and appropriate to provide a basis for our audit opinionon the internal financial controls with reference to consolidatedfinancial statements.

Meaning of Internal Financial Controls with reference toconsolidated financial statements

A company’s internal financial controls with reference toconsolidated financial statements is a process designed to providereasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. Acompany’s internal financial controls with reference to consolidatedfinancial statements includes those policies and procedures that(1) pertain to the maintenance of records that, in reasonable detail,accurately and fairly reflect the transactions and dispositions ofthe assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation offinancial statements in accordance with generally acceptedaccounting principles, and that receipts and expenditures of thecompany are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection ofunauthorized acquisition, use, or disposition of the company’s assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with referenceto consolidated financial statements

Because of the inherent limitations of internal financial controlswith reference to consolidated financial statements, including thepossibility of collusion or improper management override ofcontrols, material misstatements due to error or fraud may occurand not be detected. Also, projections of any evaluation of theinternal financial controls with reference to consolidated financialstatements to future periods are subject to the risk that the internalfinancial controls with reference to consolidated financialstatements may become inadequate because of changes inconditions, or that the degree of compliance with the policies orprocedures may deteriorate.

Qualified Opinion

According to the information and explanation given to us and basedon our audit and based on the audit report of other auditors ofsubsidiaries companies and associate company, in our opinion theHolding Company and such companies incorporated in India whichare its subsidiary companies and associate company have, in allmaterial respects, adequate internal financial controls with

ANNEXURE ‘A’ TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE CONSOLIDATED FINANCIAL STATEMENTS OFJAGATJIT INDUSTRIES LIMITED


reference to consolidated financial statements and such internalfinancial controls were operating effectively as at March 31, 2020,except in respect of trade receivable reconciliation/confirmation,provision for bad and doubtful debts and accounts payablereconciliation/confirmation where controls were found to beineffective and in respect of various areas namely updating ofstatus of contingent liabilities, Rolling Cash Plan (HO), recoveryof loan & advances from employees/suppliers, Full & Finalsettlement of employees, Revenue recognition of royalty incomefrom franchise operation, revenue recognition of third partysupply agreement and operating assessment of controlregarding updating the Secretarial Department in respect ofborrowings from Group entities where controls were effectivebut need to be strengthened, based on the internal control withreference to consolidated financial statements criteria establishedby the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute ofChartered Accountants of India (the “Guidance Note”).

Other Matters

Our aforesaid report under Section 143(3)(i) of the Act on theadequacy and operating effectiveness of the internal financialcontrols with reference to consolidated financial statements in sofar as it relates to six subsidiary companies and an associatecompany, which are companies incorporated in India, is based onthe corresponding reports of the auditors of such companiesincorporated in India.



M. K. MadanPlace: New Delhi ProprietorDate: 03.09.2020 Membership number: 082214UDIN: 20082214AAAACG6832



90

(` in Lakhs)Particulars Notes As at As at

March 31, 2020 March 31, 2019ASSETS1 Non-current assets

a) Property, plant and equipment 3A 37,268 38,046b) Other intangible assets 3B - 1,251c) Capital work-in-progress 3C 18 22d) Right-of-use assets 3D 20 -e) Investment properties 4 1,790 1,837f) Financial assets

i) Investments 5 585 854ii) Loans 6 484 10iii) Other financial assets 7 1,214 1,513

g) Other non-current assets 8 447 4,149Total non-current assets 41,826 47,682

2 Current assetsa) Inventories 9 4,189 3,942b) Financial assets

i) Trade receivables 10 2,861 6,581ii) Cash and cash equivalents 11 1,100 951iii) Loans 12 57 894iv) Other financial assets 13 76 395

c) Other current assets 14 1,009 2,446d) Assets classified as held for sale 15 38 1,938Total current assets 9,330 17,147TOTAL- ASSETS 51,156 64,829

EQUITY AND LIABILITIESEquityEquity share capital 16 4,615 4,615Other equity 17 (109) 4,628Non Controlling Interest (4) (4)Total equity 4,502 9,239LIABILITIES1 Non-current liabilities

a) Financial liabilitiesi) Borrowings 18A 20,006 21,690ii) Other financial liabilities 19 3,348 3,647iii) Lease liability 20 3 -

b) Other long term liabilities 21 323 434c) Provisions 22A 2,378 2,245d) Deferred tax liabilities - 244Total non-current liabilities 26,058 28,260

2 Current liabilitiesa) Financial liabilities

i) Borrowings 18B 217 1ii) Trade payables 23 6,771 7,357iii) Other financial liabilities 24 5,872 11,259iv) Lease liability 20 19 -

b) Other current liabilities 25 7,271 8,289c) Provisions 22B 446 424Total Current liabilities 20,596 27,330Total liabilities 46,654 55,590Total equity and liabilities 51,156 64,829

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements




Place : New Delhi Roopesh KumarDate : September 03, 2020 Company SecretaryUDIN: 20082214AAAACG6832

Consolidated Balance Sheetas at March 31, 2020


(` in Lakhs)Particulars Notes For the year ended For the year ended

March 31, 2020 March 31, 20191 Income

a) Revenue from operations 26 22,528 24,925b) Other income 27 4,803 5,462Total income 27,331 30,387

2 Expensesa) Cost of material consumed 28 8,872 6,993b) Purchases of Stock-in-trade 29 618 478c) Changes in inventories of finished goods, work in progress and stock in trade 30 (343) 1,411d) Excise duty 461 2,499e) Employee benefit expenses 31 5,994 6,860f) Finance cost 32 4,211 7,259g) Depreciation and amortisation expenses 33 965 1,044h) Other expenses 34 13,526 10,835Total expenses 34,304 37,379

3 Profit/(loss) before tax (6,973) (6,992)4 Exceptional items (Income) 35 2,833 3735 Profit / (Loss) before tax and after exceptional items (4,140) (6,619)6 Tax expense:

Current Tax 1 -MAT Credit for the year (1) -Income tax adjustment related to earlier years - 92Derecognition of MAT credit 979 -Deferred tax (credit)/ charge (244) (234)Total tax expenses 735 (142)

7 Profit / (Loss) for the period from continuing operations (4,875) (6,477)Less : Non Controlling Interest - -Add : Share of Net Profit/(Loss) of Associates 477 -

8 Profit / (Loss) after Tax and after share of Associates & Non controlling (4,398) (6,477)interest for the period from continuing operations

9 Profit / (Loss) for the period from discontinuing operations 41 (61) (116)10 Profit / (Loss) for the period (4,459) (6,593)11 Other Comprehensive Income

Items that will not be reclassified to profit or lossRe-measurement (gains)/losses on defined benefit plans 278 60Tax impact on re-measurement (gain)/ loss on defined benefit plans - (21)Total Other Comprehensive Income 278 39

12 Total Comprehensive Income for the period (10 - 11)(Comprising Profit (Loss) (4,737) (6,632)and Other Comprehensive Income for the period)

13 Earnings per share for continuing operations (in `̀̀̀̀):Basic & Diluted 36 (10.08) (14.84)

Earnings per share for discontinued operations (in `̀̀̀̀):Basic & Diluted 36 (0.14) (0.26)

Earnings per share (for continuing and discontinued operations) (in `̀̀̀̀):Basic & Diluted 36 (10.22) (15.10)

Summary of significant accounting policies 2The accompanying notes are an integral part of the financial statements.





Consolidated Statement of Profit and Lossfor the year ended March 31, 2020



92

(` in Lakhs)


A. Cash flow from operating activities:

Net loss for the year before tax (4,201) (6,735)

Adjustments for:

Rent from investment properties (2,048) (2,000)

Fair valuation of investments 13 (600)

Depreciation 965 1,044

Interest expense 4,211 7,259

Interest income (122) (221)

Impairment of Goodwill 1,249 -

Profit on sale of properties, plant and equipment (net) (111) (361)

Bad debts/advances/stock written off 933 192

Capital Advances write off 2,971 -


Provision for obsolete/damaged inventory 146 155

Profit on sale of investment - (650)

Liability no longer required written back towards loans (6,979)

Liability no longer required written back (1,572) (1,132)

Provision for Gratuity & Leave Encashment & others 154 24

Operating profit before working capital changes (1,415) (1,541)

Changes in working capital

Trade receivables 1,390 4,148

Loans, other financial assets and other assets 1,149 2,833

Inventories (378) 1,752

Trade payables (598) (3,149)

Financial liabilities, other liabilities and provisions 1,482 1,039

Cash generated from operations 1,630 5,082

Taxes (Paid)/ Received (Net of TDS) - -

Net Cash flow/(used) from operating activities (A) 1,630 5,082

B. Cash flow from investing activities:

Purchase of property, plant and equipment including capital (152) (158)work-in-progress and capital advances

Advances against assets held for sale 100 3,927

Proceeds from sale of property, plant and equipment 176 421

Purchase of investments property - (9)

Security deposit with NSDL (1)

Sale of investments 746 713

Interest received (Revenue) 136 309

Income from investment properties 2,048 2,000

Release/(Addition) of cash (from)/for restrictive use 254 (725)

Net Cash inflow from investing activities (B) 3,307 6,478

Consolidated Cash Flow Statementfor the year ended March 31, 2020


(` in Lakhs)


C. Cash flow from financing activities:

Net Loans (repaid) / taken (7,447) (4,473)

Lease liability payments (32) -

Loans written back 6,971 -

Interest paid (4,280) (7,335)

Net cash used in financing activities ( C) (4,788) (11,808)

Net increase/ (decrease) in cash & cash equivalents (A + B + C) 149 (248)

Cash and cash equivalents at the beginning of the year 951 1,199

Cash and cash equivalents at the end of the year 1,100 951

Cash & cash equivalents comprises of

Cash, cheques & drafts (in hand) and remittances in transit 26 14

Balance with scheduled banks 1,074 937

1,100 951

(i) The aforesaid Cash Flow Statement has been prepared under the “Indirect Method” and in accordance with Ind AS -7 on Cash Flow Statements.

(ii) Figures in brackets indicate cash outgo.






Consolidated Cash Flow Statementfor the year ended March 31, 2020



94

A. Equity share capital:

Issued, subscribed and fully paid up (Share of `̀̀̀̀ 10 each) No. of shares Amount in `

At April 01, 2018 46,148,112 461,481,120


At March 31, 2019 46,148,112 461,481,120


At March 31, 2020 46,148,112 461,481,120

B. Other equity(` in Lakhs)

Particulars Reserve & Surplus Other TotalComprehensive

Income

General Capital Securities Retained RemeasurementReserve Redemption Premium Earnings of defined benefit

obligations

Balance as at March 31, 2018 2,136 580 3,697 5,485 (293) 11,605

Revaluation adjusted (345) (345)

Profit/(loss) for the year - - (6,593) - (6,593)

Other comprehensive income for the year - - - (39) (39)

Balance as at March 31, 2019 2,136 580 3,697 (1,453) (332) 4,628

Adjustment for Lease liability - -

Profit/(loss) for the year (4,459) (4,459)

Other comprehensive income for the year (278) (278)

Balance as at March 31, 2020 2,136 580 3,697 (5,912) (610) (109)






Consolidated Statement of Changes in Equityfor the year ended March 31, 2020


SIGNIFICANT ACCOUNTING POLICIES AND NOTES TOACCOUNTS

1. Corporate information

Jagatjit Industries Limited (“the Company”) is a Public LimitedCompany domiciled in India and incorporated under theprovisions of the Indian Companies Act, 1913. The registeredoffice of the Company is located at Jagatjit Nagar, Distt.Kapurthala 144802, Punjab, India. Its shares are listed onthe BSE Limited. The Company is primarily engaged in themanufacture and sale of Liquor products and job work forfood products. The Company has manufacturing plants atKapurthala (Punjab), and Behror (Rajasthan). The companyhas six subsidiaries and one associate which are domiciledin India and incorporated under the provisions of the IndianCompanies Act, 1956. The company and its subsidiariestogether referred as “the Group”. The activities of subsidiarycompanies are not significant. The expression company usedin succeeding paragraph means Jagatjit Industries Limited(Holding Company).

2. SIGNIFICANT ACCOUNTING POLICIES

2.1 (A) Basis of preparation and compliance with Ind AS:

(i) The Group prepared its financial statements inaccordance with Indian Accounting Standards(Ind AS) notified under Section 133 of theCompanies Act, 2013 read together with Rule4A of the Companies (Indian AccountingStandards) Rules, 2015 as amended, to theextent applicable, and the presentationrequirements of Division II of Schedule III to theCompanies Act, 2013.

(ii) The Accounts have been prepared on GoingConcern Basis. The Company has beensuffering losses for the last seven years andthe net working capital of the Company isnegative. During the year March 31, 2020,Company suffered net loss of ̀ 5,165 Lakhs. Inthe opinion of Management, the Company hassufficient resources to survive and curb thelosses incurred and there is no intention ofmanagement to liquidate the entity. TheCompany has undertaken following steps inorder to curtail the losses and to make theworking capital positive:-

(a) The Company has restarted its businessof distillery during the last quarter of2019-20 and positive results areexpected to contribute to the growth ofthe company during next financial year.

(b) The Company had initiated the processof monetizing its surplus immovable

property at Sahibabad (UP) andSikanderabad (UP) to repay debts /reduce finance cost and enhance itsworking capital. During the year,company has sold Sikandrabad Unit for` 1900 Lakhs. Company has alsoreceived an amount of ̀ 4,627 Lakhs asadvance for sale of Sahibabad Unit tillMarch 31, 2020, and the companyexpects to receive the balanceconsideration of ` 1900 Lakhs fromsales of its Sahibabad Unit and it will helpin improving the Cash Flow position of thecompany in next financial year. In the yearended March 31, 2020, total debts(other than group entity) has beenreduced by ` 6267 Lakhs as comparedto March 31, 2019. Finance cost for theyear ended March 31, 2020 has beenreduced to ` 4211 Lakhs as comparedto ` 7259 Lakhs for the previous year.

(c) Promoters / Promoters’ Companieshave provided its security of personal /its assets to secure term loan.Promoters have infused ` 4000 Lakhsin the form of the interest free loanthrough associate company and haveobtained the waiver of the loan.

(d) The Company has put in place a timebound plan for reduction of overheadsand non-essential expenditures resultingin reduction of employee benefitexpenses by ` 866 Lakhs, rent by ` 72Lakhs, travelling expenses by ̀ 91 Lakhsand legal expenses by ` 304 Lakhs ascompared to previous year.

(e) The company has ventured into newbusiness of hand sanitizers andaccordingly entered into arrangementswith various parties for manufacture/procurement of hand sanitizers for sales& distribution. The product of thecompany appears to be well accepted inthe market as per initial reports. This willhave positive impact on the financialperformance of the company in thecoming year.

Management is of the view that in terms ofvarious steps undertaken, full effect of the samewill be further visible by end of the next yearand will help in curtailing/reducing losses.

As per the assessment of the management, the

Notes on Consolidated Financial Statementsfor the year ended March 31, 2020



96

going concern assumption is not affected andno material uncertainty exists in this regard inview of the above mentioned factors.

The Consolidated Ind AS Financial Statementsof the Group have been prepared on a goingconcern basis using historical cost conventionand on an accrual method of accounting, exceptfor certain financial assets and liabilities,including derivative financial instruments whichhave been measured at fair value as describedbelow and defined benefit plans which have beenmeasured at actuarial valuation as required byrelevant Ind AS.

(iii) Transactions in currencies other than theGroup’s functional currency (foreign currencies)are recognized at the rates of exchangeprevailing at the dates of the transactions.

At the end of each reporting period, monetaryitems denominated in foreign currencies areretranslated at the rates prevailing at that date.Exchange differences on monetary items arerecognized in the Statement of Profit and Lossin the period in which they arise.

Non-monetary items that are measured interms of historical cost in a foreign currencyare not retranslated.

(B) Basis of Consolidation

The Consolidated Financial Statements comprises thefinancial statement of the Company, its six subsidiariesand one associate as disclosed in Note No 45(v). TheFinancial Statements of the subsidiaries andassociates used in the consolidation are drawn up tothe same reporting date as that of the parent companyi.e. year ended March 31, 2020.

(C) Principles of Consolidation

(i) The Financial Statements of the company andits subsidiaries have been combined on a lineby line basis by adding together the book valuesof like items of assets, liabilities, income andexpenditure after eliminating intra groupbalances and intra group transactions.

(ii) The Financial Statements of the company, itssubsidiaries and associates have beenconsolidated using uniform accounting policiesfor like transactions and other events.

(iii) The Consolidated Financial Statements includethe share of profit/loss of the associatecompany (to the extent of value of investment)which has been accounted for using equity

method as per Indian Accounting Standard 110- Consolidated Financial Statements.Accordingly, the share of profit/loss from theassociate company has been added/ deductedto the cost of Investments.

(iv) Goodwill represents the difference between thecompany’s share in net worth and cost ofacquisition of subsidiary at each stage ofacquisition of investment. Goodwill arising onconsolidation is not amortized but is tested forimpairment on annual basis.

(v) Non-controlling interest in the net assets of theconsolidated subsidiaries consists of theamount of equity attributable to the minorityshareholders at the date on which investmentsin the subsidiary companies were made andfurther movements in their share in the equity,subsequent to the dates of investments. Netprofit/loss for the year of the subsidiariesattributable to non-controlling interest isidentified and adjusted against the profit/lossafter tax of the Group in order to arrive at theincome attributable to shareholders of theCompany.

2.2 Current versus non-current classification:

All Assets and Liabilities have been classified as current ornon-current considering the operating cycle of 12 months.

Deferred tax assets and liabilities are classified as non-current assets and liabilities respectively.

2.3 Fair value measurement:

Fair value is the price that would be received to sell assetsor paid to transfer a liability in an orderly transaction betweenmarket participants at the measurement date. Fair value formeasurement and / or disclosed in these financial statementis determined on such basis.

All Assets and Liabilities for which fair value is measured ordisclosed in the financial statements are categorised withinthe fair value hierarchy, which are described as follows; LevelI - III

Level I input

Level I input are quoted price in active market for identicalassets or liabilities that the entity can access at themeasurement date, a quoted price in an active marketprovides the most reliable evidence of fair value and is usedwithout adjustment to measure fair value whenever available,with limited exception. If an entity holds a position in a singleassets or liabilities and the assets or liabilities is traded in anactive market, the fair value of assets or liabilities held by theentity, even if the market normal daily trading volume is not

Notes on Consolidated Financial Statements (Contd.)for the year ended March 31, 2020


sufficient to absorb the quantity held and placing orders tosell the position in a single transaction might affect the quotedprice.

Level II input

Level II inputs are those inputs other than quoted marketprices included within Level I that are observable for theassets or liabilities either directly or indirectly.

Level II inputs include:

- Quoted price for similar assets or liabilities in activemarket.

- Quoted price for identical or similar assets or liabilitiesin market that are not active.

- Input other than quoted prices that are observablefor the assets or liabilities.

- Interest rate and yield curve observable at commonlyquoted interval.

- Implied volatilise.

- Credit spreads.

- Inputs that are derived principally or from corroboratedmarket data co-relation or other means (‘marketcorroborated inputs’).

Level III input

Level III inputs are unobservable inputs for the asset or liability.Unobservable inputs are used to measure fair value to theextent that relevant observable inputs are not available,thereby allowing for situations in which there is little, if any,market activity for the asset or liability at the measurementdate. An entity develops unobservable inputs using the bestinformation available in the circumstances, which mightinclude the entity’s own data, taking into account allinformation about market participant assumptions that isreasonably available.

For assets and liabilities that are recognized in the financialstatements on a recurring basis, the Group determineswhether transfers have occurred between levels in thehierarchy by re-assessing categorisation (based on the lowestlevel input that is significant to the fair value measurementas a whole) at the end of each reporting period.

2.4 Functional and presentation currency:

These Ind AS Financial Statements are prepared in “IndianRupee” which is the Group’s functional currency. All financialinformation presented in Rupees has been rounded to thenearest Lakhs.

2.5 Property, plant and equipment:

(i) Property, plant and equipment

The Group applied Ind AS 16 with retrospective effect

for all of its properties, plants and equipments as atthe transition date, viz., April 01, 2016. On April 01,2016 the Group carried out fresh revaluation of Landowned by the Group as PPE. The revaluation was doneby an independent valuer on fair market value basis.Consequently, the revaluation reserve amounting to` 26,779 lacs has been transferred to retainedearnings.

The Group has been granted leasehold lands for theperiod of 99 years and accordingly, the same is treatedas finance lease. This is treated as part of propertiesplant and equipment due to duration of lease periodand availability of transfer of leasehold rights. Inabsence of absolute certainity regarding vesting ofownership with the Group at the determination oflease, depreciation is being charged on the revaluedfigure of Land on straight line basis over the period oflease.

The initial cost of property, plant and equipmentcomprises its purchase price, including import dutiesand non-refundable purchase taxes, attributableborrowing cost and any other directly attributablecosts of bringing an asset to working condition andlocation for its intended use. It also includes thepresent value of the expected cost for thedecommissioning and removing of an asset andrestoring the site after its use, if the recognition criteriafor a provision are met.

Expenditure incurred after the property, plant andequipment have been put into operation, such asrepairs and maintenance, are normally charged to theStatements of Profit and Loss in the period in whichthe costs are incurred. Major inspection and overhaulexpenditure is capitalized if the recognition criteria aremet.

When significant parts of plant and equipment arerequired to be replaced at intervals, the Groupdepreciates them separately based on their specificuseful lives. Likewise, when a major inspection isperformed, its cost is recognised in the carryingamount of the plant and equipment as a replacementif the recognition criteria are satisfied. All other repairand maintenance costs are recognised in theStatement of Profit and Loss as incurred.

The residual values, useful lives and methods ofdepreciation of property, plant and equipment arereviewed at each financial year end and adjustedprospectively, if considered appropriate.

When an item of property, plant and equipment isscrapped or otherwise disposed off, the cost andrelated deprecation are removed from the books of




98

account and resultant profit or loss, if any, is reflectedin Statement of Profit and Loss.

(ii) Capital work in progress

Assets in the course of construction are capitalized incapital work in progress account. At the point whenan asset is capable of operating in the mannerintended by management, the cost of construction istransferred to the appropriate category of property,plant and equipment. Costs associated with thecommissioning of an asset are capitalised when theasset is available for use but incapable of operating atnormal levels until the period of commissioning hasbeen completed. Cost includes financing cost relatingto borrowed funds attributable to construction.

(iii) Depreciation

The Group depreciates property, plant and equipmentover the useful life as prescribed in schedule II of theCompanies Act, 2013 on the straight-line method fromthe date the assets are ready for intended use. Assetsin the course of construction and freehold land arenot depreciated. In respect of following assets of theGroup, different useful life is taken than thoseprescribed in schedule II:

Particulars Depreciation

Boiler No-5 Over its useful life as technicallyassessed (35 Years)

Turbine 7MW Over its useful life as technicallyassessed (35 Years)

Evaporator Spent Over its useful life as technicallyWash assessed (35 Years)

MMF Plant (III shift) Over its useful life as technicallyassessed (15 Years)

Leasehold land is amortised on straight line basis overthe period of lease. Leasehold Improvements areamortised on straight line basis over the useful life ofthe asset and the remaining period of lease.

2.6 Intangible Assets:

Intangible assets acquired are measured on initial recognitionat cost. Following initial recognition, intangible assets arecarried at cost less any accumulated amortisation andaccumulated impairment losses.

The useful lives of intangible assets are assessed as eitherdefinite or indefinite. Currently Group does not have anyintangible assets with indefinite useful life. Intangible assetsare amortised over the useful economic life and assessedfor impairment whenever there is an indication to the sameeffect. The amortisation period and the amortisation methodfor an intangible asset are reviewed at least at the end ofeach reporting period. Changes in the expected useful life or

the expected pattern of consumption of future economicbenefits embodied in the asset are considered to modify theamortisation period or method, as appropriate, and aretreated as changes in accounting estimates. Generallyintangible assets are amortised @ 10% per annum as SLMbasis.

2.7 Impairment of Assets:

At the end of each reporting period, the Group assesseswhether there is any indication that an asset or a group ofassets (cash generating unit) may be impaired. If any suchindication exists, the recoverable amount of the asset or cashgenerating unit is estimated in order to determine the extentof impairment loss (if any). When it is not possible to estimatethe recoverable amount of the cash generating unit to whichthe asset belong recoverable amount is the higher of fairvalue less cost of disposal and value in use. In assessing thevalue in use, the estimated future cash flow is discounted attheir present value using the pre-tax discount rate thatreflects current market assessment of time value of moneyand the risks specific to the assets for which the estimatesof future cash flow have not been adjusted.

If the recoverable amount of an assets (or cash generatingunit) is estimated to be less than its carrying amount, thecarrying amount of the assets (or cash generating unit) isreduced to its recoverable amount. An impairment loss isrecognized immediately in the Statement of Profit and Loss.

When an impairment loss subsequently reverses, thecarrying amount of the asset (or a cash generating unit) isincreased to the revised estimate of its recoverable amount,so that the increased carrying amount does not exceed thecarrying amount that would have been determined had noimpairment loss recognized immediately in the Statement ofProfit and Loss.

2.8 Cash and Cash equivalent:

Cash and cash equivalent in the Balance Sheet comprise cashat banks and on hand and short-term deposits with an originalmaturity of three months or less, which are subject to aninsignificant risk of changes in value.

For the purpose of Statement of Cash Flows, cash and cashequivalents consist of cash and short-term deposits, asdefined above.

2.9 Financial instruments:

A financial instrument is any contract that gives rise to afinancial asset of one entity and a financial liability or equityinstrument of another entity. Financial assets and financialliabilities are recognized when a Group becomes a party tothe contractual provisions of the instruments.

(i) Initial recognition and measurement:

Financial assets and financial liabilities are recognized



when a Group becomes a party to the contractualprovisions of the instruments. Financial assets andfinancial liabilities are initially measured at fair value.Transaction costs that are directly attributable to theacquisition of financial assets or issue of financialliabilities (other than financial assets and financialliabilities at fair value through profit and loss) are addedto or deducted from the fair value of the financialassets or financial liabilities, as appropriate, on initialrecognition. Transaction costs directly attributable tothe acquisition of financial assets or financial liabilitiesat fair value through profit or loss are recognizedimmediately in the Statement of Profit and Loss.

(ii) Subsequent measurement of financial assets:

For purposes of subsequent measurement, financialassets are classified in four categories and measuredas under:

(a) Debt instruments at amortized cost.

(b) Debt instruments at Fair Value Through OtherComprehensive Income (FVTOCI).

(c) Debt instruments, derivatives and equityinstruments at Fair Value Through Profit orLoss (FVTPL).

(d) Equity instruments measured at Fair ValueThrough Other Comprehensive Income(FVTOCI).

(a) A ‘debt instrument’ is measured at theamortized cost, if both the following conditionsare met:

(i) The asset is held within a business modelwhose objective is to hold assets forcollecting contractual cash flows; and

(ii) Contractual terms of the asset give riseon specified dates to cash flows that areSolely Payments of Principal and Interest(SPPI) on the principal amountoutstanding.

After initial measurement, such financial assetsare subsequently measured at amortized costusing the Effective Interest Rate (EIR) method.Amortized cost is calculated by taking intoaccount any discount or premium on acquisitionand fees or costs that are an integral part ofthe EIR. The EIR amortization is included infinance income in the profit or loss. The lossesarising from impairment are recognized in theprofit or loss. This category generally applies totrade and other receivables.

(b) A ‘debt instrument’ is classified as FVTOCI, ifboth of the following criteria are met:

(i) The objective of the business model isachieved both by collecting contractualcash flows and selling the financialassets; and

(ii) The asset’s contractual cash flowsrepresent SPPI.

Debt instruments included within the FVTOCIcategory are measured initially as well as ateach reporting date at fair value. Fair valuemovements are recognized in OCI. However, theGroup recognizes interest income, impairmentlosses and foreign exchange gain or loss in theprofit or loss. On de-recognition of the asset,cumulative gain or loss previously recognizedin OCI is reclassified from the equity to profit orloss. Interest earned whilst holding FVTOCI debtinstrument is reported as interest income usingthe EIR method.

(c) FVTPL is a residual category for debtinstruments. Any debt instrument, which doesnot meet the criteria for categorization as atamortized cost or as FVTOCI, is classified as atFVTPL. Debt instruments included within theFVTPL category are measured at fair value withall changes recognized in the profit or loss.

(d) All equity investments in scope of Ind AS 109are measured at fair value. Equity Instrumentswhich are held for trading are classified as atFVTPL. If the Group decides to classify an equityinstrument as at FVTOCI, then all fair valuechanges on the instrument, excluding dividends,are recognized in the OCI. Equity instrumentsincluded within the FVTPL categoryare measured at fair value with all changesrecognized in the profit or loss.

(iii) Derecognition of financial assets:

The Group derecognizes a financial asset when andonly when the contractual rights to the cash flows fromthe asset expire, or when it transfers the financialasset and substantially all the risks and rewards ofownership of the asset to another party. Onderecognition of a financial asset in its entirety, thedifference between the asset’s carrying amount andthe sum of the consideration received and receivableand the cumulative gain or loss that had beenrecognized in Other Comprehensive Income andaccumulated in equity is recognized in the Statementof Profit and Loss if such gain or loss would haveotherwise been recognized in the Statement of Profitand Loss on disposal of that financial asset.




100

(iv) Impairment of financial assets:

The Group applies the expected credit loss model forrecognizing impairment loss on financial assets. TheGroup follows ‘simplified approach’ for recognition ofimpairment loss allowance. The application of simplifiedapproach does not require the Group to track changesin credit risk. Rather, it recognizes impairment lossallowance based on lifetime ECLs at each reportingdate, right from its initial recognition.

(v) Subsequent measurement of financial liabilities:

All the financial liabilities are subsequently measuredat amortized cost using the effective interest ratemethod or at fair value through profit and loss. Gainsand losses are recognized in profit or loss when theliabilities are derecognized as well as through the EIRamortization process.

(vi) Derecognition of financial liabilities

A financial liability is derecognized when the obligationunder the liability is discharged or cancelled or expires.When an existing financial liability is replaced byanother from the same lender on substantiallydifferent terms, or the terms of an existing liability aresubstantially modified, such on exchange ormodification is treated as the derecognition of theoriginal liability and the recognition of a new liability.The difference in the respective carrying amounts isrecognized in the Statement of Profit and Loss.

2.10 Inventories

Inventories are valued at the lower of cost and net realisablevalue except scrap and by-products which are valued at netrealisable value. Costs comprises as follow:

(i) Raw materials, Packing Materials, Store andSpares: Cost includes cost of purchase and othercosts incurred in bringing the inventories to theirpresent location and condition. Cost is determined onweighted average basis.

(ii) Finished goods and work in progress: Cost includescost of direct materials and labour and a proportionof manufacturing overheads based on the normaloperating capacity but excluding borrowing costs. Costis determined on weighted average basis. In pursuanceof IND AS-2 indirect production overheads (estimatedby the Management) have been allocated forascertainment of cost of finished goods.

(iii) Net realisable value is the estimated selling price inthe ordinary course of business, less estimated costsof completion and the estimated costs necessary tomake the sale.

(iv) Obsolete inventories are identified and written down

to net realisable value. Slow moving and defectiveinventories are identified and provision for the sameis made. Inventories are valued on lower of cost ornet realizable value.

2.11 Retirement Benefits

Group follows IND AS-19 as detailed below: -

(a) Short-term benefits are recognized as expense at theundiscounted amount in the Statement of Profit andLoss of the year in which the related service isrendered.

(b) Group provides bonus to eligible employees as per theBonus Act, 2015 and accordingly liability is providedon actual cost at the end of the year.

(c) Provident Fund: The eligible employees of the Groupare entitled to receive benefits under the ProvidentFund, a defined contribution plan in which bothemployees and the Group make monthly contributionsat a specified percentage of the covered employee’ssalary. The contributions as specified under the laware paid to the respective Regional Provident FundCommissioner and the Central Provident Fund underthe State Pension Scheme.

(d) The Group has an obligation towards gratuity a definedbenefit retirement plan covering all employees. Theplan provides for a lumpsum payment to employeesat retirement/determination of service on the basisof 15 days terminal salary for each completed year ofservice subject to maximum amount of Rs. 20 Lacs.

Group’s liability towards gratuity and compensatedabsences is determined using the projected unit creditmethod, with actuarial valuations being carried out atthe end of each annual reporting period.Remeasurement, comprising actuarial gains andlosses, the effect of the changes to the plan assets(excluding net interest), is reflected immediately in theBalance Sheet with a charge or credit recognized inOther Comprehensive Income (OCI) in the period inwhich they occur. Remeasurement recognized in theOther Comprehensive Income is reflected immediatelyin retained earnings and is not reclassified to profit orloss. Past service cost is recognized in profit or loss inthe period of a plan amendment. Net interest iscalculated by applying the discount rate at thebeginning of the period to the defined benefit liabilityor asset.

Defined benefit costs are categorized as follows:

• Service cost (including current service cost,past service cost as well as gains and losseson curtailments and settlements);



• Net interest expense or income; and

• Remeasurement

2.12 Revenue Recognition

Revenue is recognized as per Ind AS 115 “Revenue fromcontract with customers”. Revenue from contract withcustomers is recognized when control of promised goodsand services are transferred to customers at an amountthat reflects the consideration which the Group expects toreceive in exchange for those goods.

(a) Sale of goods and rendering of services: Revenue fromsale of goods and rendering of services includingexport benefits thereon are recognized at the point intime when control of goods or services is transferredto the customer which is usually on dispatched /delivery of goods or services, based on contracts withthe customers.

(b) Sales include goods sold by contract manufacturers(CMU) on behalf of the Group, since risk and rewardbelong to the Group in accordance with the terms ofthe relevant contract manufacturing agreements. Therelated cost of sales is also recognized by the Group,as and when incurred by the CMU.

(c) Sales through State Corporation: Revenue isrecognized at the time of dispatch/delivery to theCorporation as significant risk & rewards associatedwith ownership are transferred to the Corporationalong with the transfer of the property in goods. TheGroup has complete physical control over the goodsand the liquor manufacturer does not have any rightto take back or have lien on such goods.

(d) Interest Income is recorded on time proportion basisusing the effective rate of Interest (EIR).

(e) Rent: Rental Income is accounted on accrual basis.

(f) Interest on Income Tax refunds, Insurance claims,Export benefits and other refunds are accounted foras and when amounts receivable can be reasonablydetermined as being acceptable to authorities.

(g) Royalty income is accounted on an accrual basis inaccordance with terms specified in the relevantagreements.

(h) Income from franchisees business: The Group hasentered into supply agreement with few parties. Underthe agreement, parties manufacture at their own costunder supervision of the Group and sell the same toretailers (Licensees) on behalf of the Group. Revenueis recognised net of cost of goods sold.

2.13 Manufacturing policy

The main raw material of the Group is ENA, which is used to

produce Indian Made Foreign Liquor (IMFL) and CountryLiquor (CL). Manufacturing policy of the Indian alcoholic spiritmarket is highly regulated by the States who control thealcoholic beverage industry. The Indian liquor industry hasbeen experiencing challenges such as state policies withrespect to import & export from one state to the other,production constraints with respect to the pack sizes andtype of packaging, price control and increasing state levies& duties.

2.14 Taxation:

Current income tax

Current income tax assets and liabilities are measured atthe amount expected to be recovered from or paid to thetaxation authorities. The tax rates and tax laws used tocompute the amount are those that are enacted orsubstantively enacted, at the reporting date. Current incometax relating to items recognised outside profit or loss isrecognised outside profit or loss (either in OtherComprehensive Income or in equity). Current tax items arerecognised in correlation to the underlying transaction eitherin OCI or directly in equity. Management periodically evaluatespositions taken in the tax returns with respect to situationsin which applicable tax regulations are subject tointerpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is provided using the liability method ontemporary differences between the tax bases of assets andliabilities and their carrying amounts for financial reportingpurposes at the reporting date. Deferred tax liabilities arerecognised for all taxable temporary differences, except whenit is probable that the temporary differences will not reversein the foreseeable future. Deferred tax assets are recognisedfor all deductible temporary differences, the carry forwardof unused tax credits and any unused tax losses. Deferredtax assets are recognised to the extent that it is probablethat taxable profit will be available against which the deductibletemporary differences, and the carry forward of unused taxcredits and unused tax losses can be utilized.

The carrying amount of deferred tax assets is reviewed ateach reporting date and reduced to the extent that it is nolonger probable that sufficient taxable profit will be availableto allow all or part of the deferred tax asset to be utilised.Unrecognised deferred tax assets are re-assessed at eachreporting date and are recognised to the extent that it hasbecome probable that future taxable profits will allow thedeferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the taxrates that are expected to apply in the year when the assetis realized or the liability is settled, based on tax rates (andtax laws) that have been enacted or substantively enacted atthe reporting date.




102

Deferred tax relating to items recognised outside profit orloss is recognised outside profit or loss (either in OtherComprehensive Income or in equity). Deferred tax items arerecognised in correlation to the underlying transaction eitherin OCI or directly in equity.

Deferred tax assets and deferred tax liabilities are offset if alegally enforceable right exists to set off current tax assetsagainst current tax liabilities and the deferred taxes relateto the same taxable entity and the same taxation authority.

GST paid on acquisition of assets or on incurring expenses:

Expenses and assets are recognised net of the amount ofGST paid, except:

When the tax incurred on a purchase of assets or servicesis not recoverable from the taxation authority, in which case,the tax paid is recognised as part of the cost of acquisition ofthe asset or as part of the expense item, as applicable.

When receivables and payables are stated with the amountof tax included, the net amount of tax recoverable from, orpayable to, the taxation authority is included as part ofreceivables or payables in the balance sheet.

Minimum Alternate Tax

Minimum Alternate Tax (MAT) paid in accordance with thetax laws, which gives future economic benefits in the form ofadjustment to future income tax liability, is considered as anasset if there is convincing evidence that the Group will paynormal income tax. Accordingly, MAT is recognised as anasset in the Balance Sheet when it is probable that futureeconomic benefit associated with it will flow to the Group.

2.15 Borrowing Costs:

Borrowing costs directly attributable to the acquisition,construction or production of an asset that necessarily takesa substantial period of time to get ready for its intended useor sale are capitalised as part of the cost of the asset. Allother borrowing costs are expensed in the period in whichthey occur. Borrowing costs consist of interest and othercosts that an entity incurs in connection with the borrowingof funds. Borrowing cost also includes exchange differencesto the extent regarded as an adjustment to the borrowingcosts.

2.16 Foreign Currency Transactions:

Foreign Currency Transactions involving export sales arerecorded in the reporting currency, by applying to the foreigncurrency amount the exchange rate between the reportingcurrency and the foreign currency on the customs rate onthe date of dispatch of goods. The difference between therates recorded and the rates on the date of actual realizationis transferred to difference in exchange fluctuation account.At the year end, the balances are converted at the year end

rate and difference if any between the book balance andconverted amount are transferred to the exchangefluctuation account. The premium or discount arising at theinception of a forward exchange contract is amortized asexpenses / income over the life of the contract. Any profit orloss arising on cancellation or renewal of such a forwardcontract is recognized as income / expenses for the period.Non-monetary items that are measured in historical cost ina foreign currency are not retranslated.

2.17 Provisions:

Provisions are recognized when the Group has a presentobligation (legal or constructive) as a result of a past event, itis probable that an outflow of resources embodying economicbenefits will be required to settle the obligation and a reliableestimate can be made of the amount of the obligation. Whenthe Group expects some or all of the provisions to bereimbursed, the reimbursement is recognized as a separateasset, but only when the reimbursement is virtually certain.The expense relating to a provision is presented in theStatement of Profit and Loss, net of any reimbursement.

If the effect of the time value of money is material, provisionsare discounted using a current pre-tax rate that reflects,when appropriate, the risks specific to the liability. Whendiscounting is used, the increase in the provision due to thepassage of time is recognized as a finance cost.

2.18 Earning Per Share:

The Company presents basic and diluted Earning Per Share(“EPS”) data for its equity shares. Basic EPS is calculated bydividing the profit and loss attributable to equity shareholdersof the Company by the weighted average number of equityshares outstanding during the period. Diluted EPS isdetermined by adjusting the profit and loss attributable toequity shareholders and the weighted average number ofequity shares outstanding for the effects of all dilutive potentialequity shares.

2.19 Segment Reporting:

(a) Segment assets and liabilities:

All Segment assets and liabil ities are directlyattributable to the segment. Segment assets includeall operating assets used by the segment and consistprincipally of PPE, inventories, trade receivable,financial assets and operating cash and bank balances.Segment assets and liabilities do not include inter-corporate deposits, share capital, reserves andsurplus, borrowings, and income tax (both current anddeferred).

(b) Segment revenue and expenses:

Segment revenue and expenses are directly



attributable to segment. It does not include interestincome on inter-corporate deposits, interest expenseand income tax.

Revenue, expenses, assets and liabilities which relateto the Group as a whole and are not allocable tosegments on reasonable basis have been includedunder “unallocated revenue/expenses/assets/liabilities”.

2.20 Cash Flow Statement:

Cash flows are reported using indirect method as set out inInd AS -7 “Statement of Cash Flows”, whereby profit / (loss)before tax is adjusted for the effects of transactions of non-cash nature and any deferrals or accruals of past or futurecash receipts or payments. The cash flows from operating,investing and financing activities of the Group are segregatedbased on the available information

2.21 Leases:

The Group as a lessee

The Group’s lease asset classes primarily consist of leasesfor buildings. The Group assesses whether a contractcontains a lease, at inception of a contract. A contract is, orcontains, a lease if the contract conveys the right to controlthe use of an identified asset for a period of time in exchangefor consideration. To assess whether a contract conveys theright to control the use of an identified asset, the assesseswhether:

(a) the contract involves the use of an identified asset.

(b) the Group has substantially all of the economic benefitsfrom use of the asset through the period of the leaseand

(c) the Group has the right to direct the use of the asset.

At the date of commencement of the lease, the Grouprecognizes a right-of-use (ROU) asset and a correspondinglease liability for all lease arrangements in which it is a lessee,except for leases with a term of 12 months or less (short-term leases) renewable every year and low value leases. Forthese short-term and low-value leases, the Group recognizesthe lease payments as an operating expense on a straight-line basis over the term of the lease.

Certain lease arrangements includes the options to extendor terminate the lease before the end of the lease term. ROUassets and lease liabilities includes these options when it isreasonably certain that they will be exercised.

The ROU assets are initially recognized at cost, whichcomprises the initial amount of the lease liability adjusted forany lease payments made at or prior to the commencementdate of the lease plus any initial direct costs less any leaseincentives. They are subsequently measured at cost lessaccumulated depreciation and impairment losses.

ROU assets are depreciated from the commencement dateon a straight-line basis over the shorter of the lease termand useful life of the underlying asset. ROU assets areevaluated for recoverability whenever events or changes incircumstances indicate that their carrying amounts may notbe recoverable. For the purpose of impairment testing, therecoverable amount (i.e. the higher of the fair value less costto sell and the value-in-use) is determined on an individualasset basis unless the asset does not generate cash flowsthat are largely independent of those from other assets. Insuch cases, the recoverable amount is determined for theCash Generating Unit (CGU) to which the asset belongs.

The lease liability is initially measured at amortized cost atthe present value of the future lease payments. The leasepayments are discounted using the interest rate implicit inthe lease or, if not readily determinable, using the incrementalborrowing rates in the country of domicile of these leases.Lease liabilities are remeasured with a correspondingadjustment to the related ROU asset if the Group changesits assessment of whether it will exercise an extension or atermination option.

Lease liability and ROU assets have been separatelypresented in the Balance Sheet and lease payments havebeen classified as financing cash flows.

The Group as a lessor

Leases for which the Group is a lessor is classified as afinance or operating lease. Whenever the terms of the leasetransfer substantially all the risks and rewards of ownershipto the lessee, the contract is classified as a finance lease. Allother leases are classified as operating leases.

When the Group is an intermediate lessor, it accounts forits interests in the head lease and the sublease separately.The sublease is classified as a finance or operating lease byreference to the ROU asset arising from the head lease.

For operating leases, rental income is recognized on astraight line basis over the term of the relevant lease.

Transition

Effective April 1, 2019, the Group adopted Ind AS 116,“Leases” and applied the standard to all lease contractsexisting on April 1, 2019 using the modified retrospectivemethod. Accordingly comparatives for the year ended March,2019 have not been retrospectively adjusted and thereforewill continue to be reported under the accounting policiesincluded as part of our Annual Report for year ended March31, 2019. Consequently, the Group recorded the lease liabilityat the present value of the lease payments discounted at theincremental borrowing rate and the ROU asset at its carryingamount. The Financial effect has been disclosed in Note No45(ii).




104

2.22 Contingent liabilities:

A contingent liability is a possible obligation that arises frompast events and whose existence will be confirmed only bythe occurrence or non-occurrence of one or more uncertainfuture events not wholly within the control of the Group; or apresent obligation that arises from past events but is notrecognized because it is not probable that an outflow ofresources embodying economic benefits will be required tosettle the obligation; or the amount of the obligation cannotbe measured with sufficient reliability. The Group does notrecognize a contingent liability but discloses its existence inthe consolidated Ind AS financial statements.

2.23 Use of estimates and judgments:

The preparation of financial statements requires estimatesand assumptions to be made that affect the reported amount

of assets and liabilities on the date of financial statementsand the reported amount of revenues and expenses duringthe reporting period. Difference between the actual resultsand estimates are recognised in the period in which it isknown/materialised.

In particular, information about significant areas of estimation,uncertainty and critical judgments in applying accountingpolicies that have the most significant effect on the amountsrecognized in the financial statements are included in thefollowing notes:

(i) Property, plant and equipments

(ii) Intangible assets

(iii) Taxes on income

(iv) Retirement and other employee benefits



3A. PROPERTY, PLANT AND EQUIPMENT(` in Lakhs)

Particulars Land Land Building Furniture Plant & Other Vehicles TotalFree Hold Lease Hold & Fixtures Machinery Equipment


As at March 31, 2018 23,789 3,133 6,180 239 9,054 190 448 43,033

Additions - - 86 26 24 18 154

Disposals - - - - (32) (2) (60) (94)


Assets classified as held for sale (2,282) (9) (34) (3) (2,328)

As at March 31, 2019 23,789 851 6,257 265 8,788 203 388 40,541

Additions 15 47 6 104 172

Disposals (50) (19) (157) (226)

As at March 31, 2020 23,789 851 6,222 265 8,816 209 335 40,487


As at March 31, 2018 88 535 55 781 61 217 1,737


Disposals (6) (1) (34) (41)


Assets classified as held for sale (82) (1) (83)

As at March 31, 2019 - 33 796 88 1,230 93 255 2,495


Disposals (2) (19) (138) (159)

As at March 31, 2020 - 43 1,062 114 1,733 126 141 3,219

(III) Net block

As at March 31, 2019 23,789 818 5,461 177 7,558 110 133 38,046

As at March 31, 2020 23,789 808 5,160 151 7,083 83 194 37,268

3B. OTHER INTANGIBLE ASSETS(` in Lakhs)

Particulars Patent Goodwill TotalTrade Mark


As at March 31, 2019 10 1,249 1,259

As at March 31, 2020 10 1,249 1,259


As at March 31, 2018 6 6

Amortization for the year 2 2

As at March 31, 2019 8 8

Amortization for the year 2 1,249 1,251

As at March 31, 2020 10 10

(III) Net block

As at March 31, 2019 2 1,249 1,251

As at March 31, 2020 - - -




106

3C. CAPITAL WORK IN PROGRESS(` in Lakhs)

Particulars

As at March 31, 2019 22

As at March 31, 2020 (refer footnote (iv)) 18

3D. RIGHT-OF-USE ASSETS(` in Lakhs)


Balance at the beginning of the year - -

Recognised on account of adoption of Ind AS 116 (in respect of building) 53 -

Addition during the year - -

Deletion during the year - -

Amortisation expenses during the year 33 -

20

Footnote(s) :-(i) For details of Property, plant and equipment charged as security of borrowings refer Note 18.(ii) Land at various locations have been revalued as on April 01, 2016 by an independent approved valuer on a fair market value basis.(iii) Estimated amount of capital contracts remaining to be executed is Nil (Previous year : ` 12 Lakhs)(iv) Disposal of building represent reimbursement of renovation expenses on let out property to related party which was capitalised in

earlier year.(v) Some portion of Hamira building has been let out on temporary basis. In absence of specific cost of let out portion, the same has not

been transferred to investment property.(vi) For leasehold land refer note 2.5 regarding Significant Accounting Policy.

4. INVESTMENT PROPERTIES(` in Lakhs)


Gross carrying amount at beginning of the year 2,640 2,407


Additions during the year - 9

Gross carrying amount at end of the year 2,640 2,640

Accumulated depreciation at beginning of the year 803 643


Depreciation charged during the year 47 49

Accumulated depreciation at end of the year 850 803

Net carrying amount 1,790 1,837

Footnote(s):(i) Investment in properties comprises land & building (including allied plant & machinery).(ii) Amounts recognised in profit and loss for investment properties


Rental income (including reimbursement of maintenance expenses) 2,560 2,455

Direct operating expenses from property that generated rental income 512 455

Profit from investment properties before depreciation 2,048 2,000

Depreciation for the year 47 49

Profit from investment properties 2,001 1,951



(iii) Contingent rents recognised as income - Nil.

(iv) Company has entered upon lease agreements on different dates for a period of maximum 3 years with varying rents with passage oftime. The lease(s) can be terminated at the option of lessor/lessee with notice period of three months.

(v) Fair value


Investment properties 21,464 21,464

(vi) Estimation of fair value

The company obtained independent valuations for its investment properties on April 01, 2016. The best evidence of fair value iscurrent prices in an active market for similar properties.

All resulting fair value estimates for investment properties are included in level 2. Management is of view that there is no significantchange in fair value as on March 31, 2020 and hence no valuation is done at year end.

(vii) For details of investment property charged as security of borrowings refer note 18 (i).

5. NON-CURRENT INVESTMENTS(` in Lakhs)


(A) Equity instruments (fully paid-up)

(i) Quoted

Milkfood Limited

1,350 Shares (March 31, 2019 : 1350) of ` 10 each fully paid 5 4


4,965 Shares (March 31, 2019 : 4965) of ` 2 each fully paid 2 5

GlaxoSmithKline Consumer Healthcare Limited

4 Shares (March 31, 2019 : 4) of ` 10 each fully paid 0 0

Indage Vintners Limited


McDowell Holdings Limited


Nestle India Limited


Radico Khaitan Limited


Shreno Limited


Anheuser Busch India Indev Limited (SABMiller India Limited)


Taurus The Starshare

2500 Shares (March 31, 2019 : 2500) of ` 10 each 1 1

United Breweries Limited


United Breweries (Holdings) Limited


United Spirits Limited





108

(` in Lakhs)


(ii) Unquoted

In associates

Hyderabad Distilleries and Wineries Pvt Ltd 3 3

3150 Shares (March 31, 2019 : 3150) of ` 100 each fully paid up

Add : Group Share of Profit/(Loss) upto March 31,2019 (3) (3)

Add : Group Share of Profit/(Loss) upto March 31,2020 477 -

In others

Mohan Meakin

100 ( March 31, 2019 : 132061) shares of ` 5 each fully paid 0 627

Janta Co-operative Sugar Mills Ltd.


Panipat Co-operative Sugar Mills Ltd.


Traders Bank Limited

1 Share (March 31, 2019 : 1) of ` 4 each fully paid 0 0

LPJ Holdings Pvt. Limited.


(B) Investment in Preference Shares (fully paid-up)

Qube Corporation Pvt. Ltd.

1,80,000 (March 31, 2019 : 13,50,000) Cumulative Redeemable 18 135Preference Shares of ` 10 each.

(C) Investment in government securities

Quoted

6 year National Saving Certificates (lodged with Government Authorities) 1 1

TOTAL 585 854

Footnote(s):

(i) Cost of investmentMohan Meakin Ltd. 0 39Milkfood Ltd. 1 1Punjab National Bank 4 4

(ii) The Group has sold 1,31,961 shares of Mohan Meakin Ltd. @ ` 475/- during the year in the off market as these shares are nottraded on any stock exchange and sold 11.70 Lakhs preference shares of Qube Corporation Pvt. Ltd. for ` 117 Lakhs (at par) togroup entities.

6. LOANS(` in Lakhs)


Unsecured, considered good :

Loan 10 10

Loan to employees (refer note 39, and footnote (i)) 474 -

Unsecured-Considered Doubtful :

Loan others (refer footnote(ii)) 315 -

Loan to employee - 10

Less: Provision for doubtful advances (315) (10)

Total 484 10



Footnote(s):

(i) Represent recoverable from the senior employees. In absence of stipulations of recovery, the amount is treated as non-currentassets and thus Ind AS 109 is not applicable. It was treated as current asset in the previous year under Note No 12.

(ii) Represent loan to ex-senior employee of the Group. The amount has been provided as a matter of abundant caution. Group is makingefforts to recover the loan. It was treated as current asset in the previous year under Note No 12.



Unsecured considered good :

Security deposits 364 409

Fixed deposits with bank (refer footnote-(i)) 741 1,104

Margin money accounts (refer footnote(ii)) 109 -

Unsecured considered doubtful :

Security deposits 51 -

Others 65 1

Less: Provision for doubtful deposit and others (116) (1)

Total 1,214 1,513

Footnote(s) :

(i) Includes fixed deposit of Nil (Previous Year : ` 381 Lakhs) pledged with IFCI, ` 686 Lakhs (Previous year : ` 636 Lakhs) with IndusindBank for security against interest payment (Also refer note no 18(i)), ` 43 Lakhs (Previous Year : ` 54 Lakhs) pledged with Govt.Authority as security and ` 6 Lakhs pending reconciliation.

(ii) Towards bank guarantee against statutory obligations.

8. OTHER NON-CURRENT ASSETS(` in Lakhs)


Capital advances - 2,987

MAT credit (refer footnote (i)) 1 979

Balance with revenue authorities (refer footnote (ii)) 78 67

Advances to suppliers (refer footnote (iii)) 350 -


Others 1 6

Unsecured - considered doubtful

Advances to suppliers 1,584 1,485

Others (refer footnote (iv)) 226 66

Less: Provision for doubtful advances (1,811) (1,551)

Total 447 4,149

Footnote(s):

(i) In absence of convincing evidence of future taxable profit, MAT credit of ` 979 Lakhs has been written off.

(ii) Deposit with authorities as a precondition for filing appeal against various demands raised.

(iii) It was treated as current asset in the previous year under Note 14.

(iv) Includes ̀ 37 Lakhs (given in earlier years and provided for) from director of the Group. It also includes interest free advance of ̀ 170Lakhs (Previous Year : ` 270 Lakhs treated as current) given in the earlier years. The amount has been provided as a matter ofabundant caution. The Group is making efforts to recover the said advance.




110

9. INVENTORIES(` in Lakhs)


Raw materials [includes in transit of ` 504 Lakhs (Previous Year : ` 757 Lakhs)] 1,485 1,358

Packaging materials [includes in transit of ` Nil (Previous Year : 2 Lakhs)] 243 412

Work-in-Progress 502 436

Finished Goods 1,441 1,158

Stock-in-Trade 19 24

Store and Spares 499 554

Total 4,189 3,942

Footnote(s):

(i) Raw materials and packaging materials are net of provision for obsolete inventory of ` 389 Lakhs (Previous Year : ` 527 Lakhs).

(ii) Non-moving stock of ` 67 Lakhs (Raw Material of ` 24 Lakhs, WIP of ` 9 Lakhs and Finished goods of ` 34 Lakhs) (Previous Year :Nil) against which no provision has been made. Management is of view that these stock will be utilised / disposed off in the financialyear 2020-21. Adjustment, if any, shall be made in the subsequent year.

10. TRADE RECEIVABLES(` in Lakhs)


Unsecured, considered good 2,861 6,581

Doubtful 6,202 4,588

9,063 11,169

Less: Allowance for doubtful debts 6,202 4,588

2,861 6,581

Current 2,861 6,581

Non-current - -

Footnote(s):

(i) No debts are due from directors or other officers of the Group either severally or jointly with any other person. Also, no debts are duefrom firms or private companies, in which any director is a partner or a director or a member.

(ii) Net of ` 31 Lakhs of service tax. (refer Note No 25(ii)(b))

11. CASH AND CASH EQUIVALENTS(` in Lakhs)


Cash on hand 26 14

Bank balance on current accounts (refer footnote (i)) 1074 937

Total 1100 951

Footnote(s):

(i) During the year unidentified non-operative bank balance of ` 2 Lakhs has been written off.

12. CURRENT LOANS(` in Lakhs)


Loan & advances to employees 57 894Refer Note 6(i) and Note 6(ii)Total 57 894





Fixed deposits with bank - 19

Security deposit 7 73

Margin money accounts (refer footnote(i)) 7 45

Interest receivable 1 105

Others 61 153

Total 76 395

Footnote(s):

(i) Towards bank guarantee against statutory obligation.

14. OTHER CURRENT ASSETS(` in Lakhs)


Balance with excise/revenue authorities 40 77

Advance tax 275 163

Income tax refund 344 491

Advances to suppliers 114 1,481


Others (refer footnote(i)) 4 38

Total 1,009 2,446

Footnote(s):

(i) Current year figure represent receivable from a group entity and is static for more than 3 years. Management is of the view that theamount will be recovered or adjusted in FY 2020-21.

15. ASSETS CLASSIFIED AS HELD FOR SALE(` in Lakhs)


Fixed Assets held for sale 38 1,938

(Valued at the lower of the estimated net realisable value & carrying amount)

Total 38 1,938

Footnote(s):

(i) (a) Consequent upon receipt of approval from Lessor (UPSIDC) the Group has recorded sale of Sikandrabad unit (comprising ofleasehold land, building and machinery) for ` 1900 Lakhs in books of account. There is no impact on the profit/(loss) of theGroup as carrying value of the assets (restated on NRV in previous year) equals the sale consideration.

(b) In the financial year 2016-17, assets of Glass division were treated as held for sale due to discontinuity of operations of Glassunit at Sahibabad and accordingly these were valued at lower of estimated net realisable value and carrying amount. During theearlier year, the Group had entered upon an agreement to develop and sell a part parcel of leasehold land subject to approvalof statutory/ Local Authorties for disposal of same. The Group has received a sum of ` 4627 Lakhs (Previous Year : 4527Lakhs) towards part performance of agreement. However pending receipt of formal approval from the lessor i.e. statutoryauthority for the transfer of lease hold rights in favour of propsed buyer, the same is treated as advance against assets held forsale (refer note 25). Management is hopeful for obtaining formal approval of the same, within 12 months of the reporting date.




112

16. SHARE CAPITAL(` in Lakhs)


Authorised


Issued, subscribed and fully paid up


4,615 4,615

Footnote(s):

(i) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year

Equity shares Numbers Amounts (`̀̀̀̀)Issued, subscribed and fully paid up

As at April 1, 2018 46,148,112 461,481,120


As at March 31, 2019 46,148,112 461,481,120


As at March 31, 2020 46,148,112 461,481,120

(ii) Terms/ rights attached to equity shares

(a) 18,438,112 shares referred to as equity shares are having face value of ` 10/- per share. Each holder of equity shares isentitled to one vote per share and dividend, if declared.

(b) 25,210,000 underlying Equity Shares of ` 10/- each fully paid up ranking pari-passu with existing shares were issued in thename of the Depository, The Bank of New York, representing the Global Depository Receipts (GDR) issue. GDRs do not carryany voting rights until they are converted into equity shares.

(c) 2,500,000 Equity Shares of ` 10/- each held by LPJ Holdings Pvt. Ltd., fully paid up at a premium of ` 20/- per share, as aspecial series with differential rights to dividend and voting, were issued during the financial year 2004-05. These shares haveno right to the dividend and each share carry twenty voting rights as compared to one voting right per existing equity share andwere under the lock-in-period of three years from the date of allotment.

(d) The holders of all the above Equity Shares will be entitled to receive remaining assets of the Company, after distribution of allpreferential amounts in event of liquidation of the Company.

(iii) Details of shareholders holding more than 5% Equity Shares in the Company:

As at March 31, 2020 As at March 31, 2019

Name of the shareholder Numbers Percentage Numbers Percentage

(a) The Bank of New York (the Depository) (footnote (ii) b) 25,210,000 54.63 25,210,000 54.63

(b) LPJ Holdings Pvt. Ltd. [footnote (ii)(a)] 7,418,648 16.08 7,418,648 16.08

(c) LPJ Holdings Pvt. Ltd. [footnote (ii)(c )] 2,500,000 5.42 2,500,000 5.42

17. OTHER EQUITY(` in Lakhs)


(a) Capital redemption reserve 580 580

(b) Securities premium reserve 3,697 3,697

(c) General reserve 2,136 2,136

(d) Retained earning (refer footnote (iv)) (5,912) (1,453)

(e) Other Comprehensive Income (610) (332)

Balance as at the end of reporting period (109) 4,628



Footnote(s):

(i) Capital Redemption Reserve:Capital Redemption Reserve was created pursuant to redemption of preferance shares issued in earlier years. The Capital RedemptionReserve amount may be applied by the company, in paying up unissued share of the Company to be issued to shareholders of theCompany as fully paid bonus shares.

(ii) Securities Premium ReserveWhere the Company issues shares at premium, whether for cash or otherwise, a sum equal to the aggregate amount of the premiumreceived on those shares shall be transferred to “Securities Premium account”. The Company may issue fully paid-up bonus sharesto its members out of balance lying in the Securites Premium Account and the Company can also use this reserve for buy-back ofshares.

(iii) General ReserveGeneral reserve is created out of profit earned by the company by way of transfer from surplus in the statement of profit & loss. TheCompany can use this reserve for payment for dividend and issue of fully paid up shares.

(iv) Includes revaluation reserve of ` 24,523 Lakhs (Previous Year ` 26,323 Lakhs) related to land situated at Hamira and Behror.

(v) The aggregation/disaggregation of changes in each type of reserve, retained earnings and other comprehensive income are disclosedin Statement of Changes in Equity.

18. BORROWINGS

(A) Non current borrowings(` in Lakhs)


Secured

From banks

Term loan (refer footnote (i)(iv)) 19,441 19,586

From others

Car loans (refer footnote (iii)) 67 -

Unsecured

Term Loans (refer footnote (ii)(iv)) 411 -

Inter corporate loan from related party 86 2,103

From Directors 1 1

Total 20,006 21,690

(B) Current borrowings(` in Lakhs)


Secured

Working capital loans from banks - 1

Unsecured

Inter corporate loan from related party (refer note no. (v)) 217 -

Total 217 1

Footnote(s):

Nature of Security Terms of Repayment(i) Rupee loan from Indusind Bank amounting to ` 19,552 Lakhs (Previous

Year : ̀ 19,586 Lakhs) net of processing fee of ̀ 374 Lakhs (Previous Year: ` 404 Lakhs) is secured against :-(a) Office space at 9th and 10th floor, Ashoka Estate, 24 Barakhamba

Road, New Delhi(b) Land & Building at Plot No 78, Sector 18, Institutional Area, Gurgaon,

Haryana.

Repayable by Dec-2033. Rate of Interest is11.75%




114

Nature of Security Terms of Repayment(c) Lien on fixed deposit of ` 686 Lakhs on exclusive basis. (Refer note

7(i))

` 136. Lakhs (Previous Year Nil) treated as current maturities oflong term borrowings (refer note no. 24)

(ii) Rupee loan from NBFC amounting to ̀ 1,116 Lakhs (Previous Year : ̀ 5,592Lakhs).

The facility was secured by collaterals provided by promoters and otherthird parties.

` 705 Lakhs (Previous Year ` 5592 Lakhs) treated as current maturitiesof long term borrowings (refer note no. 24)

(iii) Car Loans of ` 88 Lakhs (Previous Year : ` 13 Lakhs) are secured byhypothecation of the related cars.

` 21 Lakhs (Previous Year : ` 13 Lakhs) treated as current maturities oflong term borrowings (refer note no. 24)

(iv) Loan from NBFC (Other than car loan) and Indusind Bank are under moratorium till August 2020 due to Covid-19 pandemic.The Group is expecting its revised repayment schedule from the said institutions and pending the same for classification ofloan in current and non-current is made on the basis of existing repayment schedule.

(v) Includes loan of ` 23 Lakhs from associate company for which terms & conditions have not been stipulated and therefore it istreated as repayable on demand. Provision of interest, if any, will be made on finalisation of the terms. (Also refer note no 35& 39)

19. OTHER FINANCIAL LIABILITIES(` in Lakhs)



Total 3,348 3,647

Footnote(s):

(i) Addition/ deduction represents the securtiy deposit received / paid during the year (Net of the fair value adjustments as per IND AS109) from the franchise partners/ contact manufacturers.

20. LEASE LIABILITY(` in Lakhs)


Lease liabilities (ROU) 22

(refer Note No 45(ii) & 2.21)Total 22 -

Current 19

Non-current 3

21. OTHER LONG TERM LIABILITIES(` in Lakhs)


Advance rental income (refer footnote (i)) 323 434

Total 323 434

Footnote(s):

(i) Represent difference in fair value and carrying value of security deposit received.

Repayable by Sep 2021. Rate of Interest is20.70%

Repayable by Mar-2025. Rate of interest 8.25%to 8.75% p.a.



22. PROVISIONS

(A) Non current(` in Lakhs)


(a) Provision for employee benefits (refer footnote(i))- Gratuity 1,878 1,649


(b) Provisions for litigations (refer footnote (ii))- Service tax/ Sales tax 422 425

Total 2378 2245

(B) Current(` in Lakhs)


Provision for employee benefits (refer footnote (i))- Gratuity 323 266


- Provision for Income tax 1 -

Total 446 424

Footnote(s):

(i) Gratuity and compensated absences have been determined by actuary in terms of Ind AS 19 and accordingly provided. (fordetail refer note 38).

(ii) Includes provision of service tax of ̀ 353 Lakhs (Previous Year : ̀ 353 Lakhs) demanded by Orissa State Beverages Corporationagainst their liability to Service Tax. The matter is subjudice and adjustment will be made in the year of final decision.

23. TRADE PAYABLES(` in Lakhs)


Total outstanding dues of Micro and Small Enterprises (refer footnote (i)) 32 8

Total outstanding dues of creditors other than Micro & Small Enterprises 6,739 7,349(refer footnote (ii), (iv))Total 6,771 7,357

Footnote(s):

(i) This information regarding Micro and Small Enterprises has been determined to the extent such parties have been identified on thebasis of information available with the Group. This has been relied upon by the auditors. The Group has provided interest on thebalance outstanding of MSME parties in respect of supplies subsequent to the date of registration under MSMED Act. 2006.

(ii) Includes the amount of ` 184 Lakhs being balance of the MSME party prior to the date of its registration under the MSMED Act2006.




116

(` in Lakhs)

(iii) Details of dues to Micro, Small and Medium Enterprises as per MSMED Act, As at As at2006 March 31, 2020 March 31, 2019The principal amount and the interest due thereon remaining unpaid to any supplieras at the end of the year

- Principal Amount Unpaid 32 8

- Interest due 3 1

The amount of interest paid by the buyer in term of section 16, of the Micro, Smalland Medium Enterprise Development Act, 2006 along with the amounts of the paymentmade to suppliers beyond the appointed day during the year

- Payment made beyond the Appointed date - 12

- Interest paid beyond the Appointed date - -

The amount of interest due and payable for the period of delay in making payment 3 1(which have been paid but beyond the appointed day during the year) but withoutadding the interest specified under Micro, Small and Medium EnterpriseDevelopment Act, 2006.

The amount of interest accrued and remaining unpaid at the end of the year 4 217(refer note 24(ii).

(iv) Includes ` 38 Lakhs (Previous Year : ` 99 Lakhs) representing stale cheques issued in earlier years pending reconciliation. Theamount will be adjusted subsequently after reconciliation.

24. OTHER CURRENT FINANCIAL LIABILITIES(` in Lakhs)


Current maturities of long-term borrowings (refer note 18) 837 6,806

Unclaimed matured deposits (refer footnote (i)) 44 59

Interest accrued but not due 87 150

Interest accrued and due (refer footnote (ii)) 13 235


Employee benefits payable (refer footnote (iv)) 941 819

Expenses payable (refer footnote (iii)) 491 591

Other liabilities 155 162

Total 5,872 11,259

Footnote(s):

(i) Unclaimed Deposits are not required to be transferred to the Investor Education and Protection Fund (IEPF) in terms of section 125of the Companies Act, 2013, as these deposits are unclaimed for less than 7 years from the date of their maturity.

(ii) Includes ` 4 Lakhs (Previous Year : 217 Lakhs) payable to MSME suppliers. During the year, interest of ` 216 Lakhs (provided priorto FY 2018-19) payable to unidentified MSME suppliers no longer required have been written back.

(iii) (a) The provision for bills payable with respect to legal and professional expenses of ` 53 Lakhs have been adjusted against theadvances given in earlier years pending receipt of bills.

(b) Includes ` 71 Lakhs (Previous Year : 71 Lakhs) on account of cash discount payable for earlier years subject to confirmationand reconciliation of account with Orissa State Beverges Corporation Ltd.

(iv) Includes ` 226 Lakhs (Previous Year : ` 159 Lakhs) payable to ex-employees on account of full and final settlement which areoutstanding for more than one year. Management will review the balances in the financial year 2020-21 and pass the necessaryentry if any on completion of the review.



25. OTHER CURRENT LIABILITIES(` in Lakhs)


Advances from customers (refer footnote (i)) 1,063 475

Advances received against assets held for sale (refer note 15(i)(b)) 4,627 6,427

Statutory dues (refer footnote (ii)) 1,289 1,054

Other liabilities (refer footnote (iii)) 292 333

Total 7,271 8,289

Footnote(s):

(i) Includes ` 542 Lakhs (including ` 422 Lakhs outstanding more than 365 days) received from customers pending reconciliation. Italso includes a sum of ` 857 Lakhs received from a customer which is adjustable in 60 equal installments of ` 15 Lakhs each w.e.f.July 2020 and being shown as net of receivable of ̀ 215 Lakhs against supplies to the said customer. The Management is of the viewthat the same is not a deposit within the meaning of Sec 2(31) read with Acceptance of Deposit rules 2014.

(ii) (a) Includes provision of custom duty of ` 303 Lakhs (Previous Year : ` 453 Lakhs) in respect of goods in transit and provision ofexcise duty of ` 265 Lakhs (Previous Year : ` 69 Lakhs) in respect of closing stock of finished goods.

(b) Service tax payable of ̀ 54 Lakhs (representing difference on provision made in respect of royalty income on accrual basis andthe payment made on the actual receipt as certified by the management) included in the previous year figures has beenadjusted by recognition of income of ` 23 Lakhs and the balance amount has been adjusted from the parties account.

(iii) Represent difference in fair value and carrying value of security deposit received.

26. REVENUE FROM OPERATIONS(` in Lakhs)


(a) Sale of products (gross of excise duty) (refer note (i)) 12,683 13,904

(b) Sale of services (Job work) 8,610 8,516

(c) Other operating revenues (refer note (ii)) 872 2,252

(d) Revenue from franchisee business (refer note (iii)) 363 253

Total revenue from operations 22,528 24,925

Footnote(s):(` in Lakhs)


(i) Sale of products comprises

(a) Manufactured goods

Malt & malt extract 3,208 3,137

Processed milk 1,158 1,110

Liquor 7,035 8,602

Other 648 566

12,049 13,415

(b) Traded goods


Others 2 10

633 489

12,682 13,904




118

(` in Lakhs)


(ii) Other operating revenues comprises

Royalty (current year income is net of reversal of income 420 1,414of ` 119 Lakhs related to previous year)

Duty drawbacks 17 41

Scrap sales 121 138

Bottling charges income - 244

Miscellaneous income 314 415

872 2,252

(iii) Income from Franchisee business (refer note no 2.12(h))The Group has supply agreement with the Franchisee parties. Under the agreement,Franchisee manufacture the goods and sell the same to retailers. The Revenue forthe same is recognised net of cost of goods sold. The revenue and cost of goodssold as detailed hereunder are certified by the management.

Sales from franchisee business 13,201 6,405

Less : Cost of goods sold 12,838 6,152

Net Revenue 363 253

27. OTHER INCOME(` in Lakhs)


Interest income (refer footnote (i)) 122 222

Rental maintenance income 441 417

Rent others 12 21

Rent from investment properties 2,118 2,038

Gain on financial instruments at fair value through profit or loss 473 980

Insurance claims 9 2

Liabilities/provisions no longer required written back (refer footnote (ii)) 1,572 1,132

Misc Income (refer footnote (iii)) 56 -

Profit on sale of Investments - 650

Total 4,803 5,462

Footnote(s):

(i) Includes interest of ` 34 Lakhs (Previous Year : Nil) on income tax refund.

(ii) Includes reversal of interest payable of ` 216 Lakhs (Previous Year : Nil) to MSME Supplier (refer note no 24(ii)).(iii) Includes ` 55 Lakhs (Previous Year : Nil) written back on account of diiferences arising due to reconciliation of trade payable /

receivable balances. The amount of ̀ 55 Lakhs includes statutory liabilities of ̀ 40 Lakhs which in the opinion of the Management arenot payable.

28. COST OF MATERIAL CONSUMED(` in Lakhs)


Opening stock 2,297 2,899

Add: Purchases of raw and packaging materials 8,693 6,391

10,989 9,290

Less : Closing stock 2,118 2,297

Total 8,872 6,993



29. PURCHASES OF STOCK-IN-TRADE(` in Lakhs)



Others 5 26

Total 618 478

30. CHANGES IN INVENTORIES OF FINISHED GOODS, WORK-IN-PROGRESS AND STOCK-IN-TRADE(` in Lakhs)


Inventories at the beginning of the year:




1,618 3,029

Inventories at the end of the year:




1,961 1,618

Decrease/(Increase) (343) 1,411

31. EMPLOYEE BENEFIT EXPENSES(` in Lakhs)


Salaries, wages and bonus 4,972 5,819

Gratuity & compensation for Leave 447 423

Contribution to provident, family pension fund 328 336

Contribution to employees’ state insurance 113 134

Staff welfare expenses 134 148

Total 5,994 6,860

32. FINANCE COST(` in Lakhs)


Interest expenses on

Borrowings 3,085 5,511

Security Deposit received (refer footnote (i)) 657 264


Other 258 258

Other borrowing cost (refer footnote (ii)) 207 1,226

Total 4,211 7,259

Footnote(s):

(i) Includes ` 410 Lakhs (Previous Year : Nil) on account of interest paid on security deposit (received in earlier years) at the time of fulland final settlement with parties.

(ii) Includes ` 82 Lakhs (Previous Year : ` 507 Lakhs) towards prepayment of loan.




120

33. DEPRECIATION AND AMORTISATION EXPENSES(` in Lakhs)


Depreciation of property, plant & equipment 883 993

Depreciation of investment property 47 49

Amortisation of intangible assets 2 2

Amortisation of right-of-use assets 33 -

Total 965 1,044

34. OTHER EXPENSES(` in Lakhs)


Manufacturing expenses:Consumption of Stores and Spare parts 280 308

Power and Fuel 3,104 3,263

Repairs - Buildings 65 92

Plant and machinery 233 220

Excise Duty (refer footnote (i)) 196 (424)

Other expenses 980 1,001

Administrative & Selling expenses:Rent (refer Note 45(ii)) 36 108

Rates & Taxes 652 719

Insurance 129 162


Repairs to building 22 22


Bad debts, advances and stock written off 933 192


Provision for inventory for obsolete stock 146 155

Reimbursement of expenses to directors 2 2

Directors’ fee 10 9

Security Expenses 261 195

Forwarding charges 88 119

Advertisement, publicity and sales promotion 1,137 668

Auditor’s remuneration (refer footnote (ii)) 29 46


Fair value loss on financial instruments 486 380

Miscellaneous expenses (refer footnote (iii)) 783 981

Total 13,526 10,835

Footnote(s):

(i) Represents the difference between excise duty on valuation of opening and closing inventory of finished goods.



(ii) Payment to auditor

(` in Lakhs)


As auditor

For Audit 21 20

For Tax Audit 4 4

For Limited Review 2 2

For Tax representation - 19

Out of Pocket Expenses 2 1

29 46

(iii) Miscellaneous Expenses include :

(a) tax paid on perquisite of senior employee ` 24 Lakhs (Previous Year : ` 29 Lakhs).

(b) ` 84 Lakhs on account of reversal of income of bottling charges related to previous year on full and final settlement,

(c) Demmurage charges of ` 90 Lakhs (Previous Year : NIL) and

(d) Advance written off of ̀ 30 Lakhs (Previuos Year : NIL) on account of non fulfillment of contractual obligations in respect of newproducts.

35. EXCEPTIONAL ITEMS(` in Lakhs)


Loan no longer required (refer footnote (i)) 6,979 -

Profit on sale of property, plant and equipment 111 373

Capital advances written off (refer footnote (iv)) (2,970) -

Impairment of Goodwill (refer footnote (ii)) (1,249) -

Prior period items (refer footnote (iii)) (38)

Total 2,833 373

Footnote(s):

(i) Represent write back of loan from associate company as not payable as confirmed by the associate company.

(ii) Goodwill created on account of consolidation of Subsidiary (LP Investments Ltd.) in earlier years has been impaired during the yeardue to permanent decline in the assets of Hyderabad Distilleries & Wineries Pvt. Ltd. in which subsidiary held its investment.

(iii) In view of the non materiality of the amount of the prior period items having regard to the scale of operations of the Group entity, thereis no need to restate the corresponding comparitive figures.

(iv) One of the group companies had given capital advance of ` 2970 Lakhs in earlier years to M/S Orbit Corporation Ltd. for purchaseof Flat at city of Mumbai under unsigned agreement for sale. The group company filed suit for recovery of the said capital advance inthe High Court of Judicature at Bombay on June 12, 2018. The petition of Promoters of Orbit Corporation Ltd. to declare theminsolvent has been accepted by the Court and liquidation proceedings with regard to realisation of assets are in progress .Consideringthe remote possibility of recovery of advance, the group company vide Board Resolution dated March 12, 2020 has written off theamount of advance in the books of account.




122

36. EARNINGS PER SHARE (EPS)(` in Lakhs)


Net Profit/(Loss) attributable to shareholders (`̀̀̀̀ in Lakhs)

From continuing operations (4,398) (6,477)

From discontinued operations (61) (116)

Total (4,459) (6,593)

Weighted average number of equity shares in issue (Nos) 43,648,112* 43,648,112*

Basic / Diluted earnings per share of `̀̀̀̀ 10 each (`̀̀̀̀)

From continuing operations (10.08) (14.84)

From discontinued operations (0.14) (0.26)

Total basic and diluted earnings per share (10.22) (15.10)

Footnote(s):

(i) The Group does not have any outstanding dilutive potential equity shares. Consequently the basic and diluted earning per share of theGroup remain the same.

* The preferential allotment of 2,500,000 equity shares, having no right to dividend has not been considered in the above computationof EPS (Refer footnote 16 (ii)c)).

37. CONTINGENT LIABILITIES:(` in Lakhs)


(a) Claim against the company not acknowledged as debt :

Service tax (footnote (i)) 389 389

Sales tax /VAT (footnote (ii)) 1,296 562

Employee state insurance/others (footnote (iii)) 214 175

Others (footnote (iv)) 22 22

Total 1,921 1,148

Footnote(s) :

(i) Service tax

(a) Demand of service tax and penalty in respect of wrong availment of service tax Cenvat Credit ` 247 Lakhs (Previous year `247 Lakhs). Against this, the Group has made an application under SABKA VISHWAS (LEGACY DISPUTE RESOLUTION) SCHEME,2019 and response of competent authority is awaited.

(b) Demand of service tax “under service of supply of tangible goods” ` 124 Lakhs ( Previous year ` 124 Lakhs).

(c) Demand of service tax and penalty “under management, maintenance and repair services” ` 18 Lakhs ( Previous year ` 18Lakhs).

(ii) Sales tax / VAT

(a) Demand of sales tax under Central Sales Tax Act on account of incomplete/non submission of sales tax forms ` 4 Lakhs(Previous Year : ` 45 Lakhs)

(b) Demand of sales tax & penalty under Telangana VAT Act on account of VAT on royalty ` 103 Lakhs (Previous year ` 103Lakhs).

(c) Demand of sales Tax & penalty under Punjab VAT Act on account of input VAT credit denied on rice husk ̀ 220 Lakhs (Previousyear ` 220 Lakhs).

(d) Demand of sales tax under Haryana VAT Act on account of disallowance of credit of excess VAT deposited due to rate difference` 40 Lakhs (Previous year ` 40 Lakhs.)

(e) Demand of sales tax under Ranchi VAT Act Assessment for FY 2013-14 ` 20 Lakhs (Previous year ` 20 Lakhs )

(f) Demand for disallowance of ITC on purchase of rice flour ` 108 Lakhs (Previous year ` 108 Lakhs)

(g) Demand of sales tax under Ranchi VAT Act Assessment for FY 2014-15 ` 4 Lakhs (Previous year : 4 Lakhs)



(h) Demand of sales tax under Andhra Pradesh VAT Act Assessment for FY 2012-13 ` Nil (Previous year ` 22 Lakhs).

(i) During the year Group has received a demand notice of ̀ 2042 Lakhs (due to non credit of deposited challans) from Commercialtaxes department, Rajasthan. The Group has submitted challans of ` 2042 Lakhs and other required documents. Howeverdepartment has not given credit of ` 797 Lakhs. Management is hopeful that entire demand will be cancelled shortly.

(iii) Employee state insurance/employee related

(a) Claim in respect of case filed by ESI Corporation ` 6 Lakhs (Previous year ` 6 Lakhs)

(b) Employees related claims ` 208 Lakhs (Previous year ` 169 Lakhs)

(iv) Others

(a) Claim by Punjab Government in respect of amount paid to Mahalaxmi Sugar Mills pending before the ‘The Court of Civil Judge(Senior Division), Kapurthala’ ` 22 Lakhs (Previous year ` 22 Lakhs).

(b) There are certain claims against the Company relating to usage of trade mark etc., which have not been acknowledged asdebts. The quantum and outcome of such claims is not ascertainable at this stage.

(v) Certain matters relating to various assessment years of Income Tax are pending at the various levels of tax authorities and HighCourt. The financial impact, if any, on the outcome of these matters is not determinable at this stage.

(vi) The Group is contesting these demands (stated in footnote (i) to (v)) and the management, based on advise of its advisors, believesthat its position will likely be upheld in the appellate process. No expense has been accrued in the consolidated financial statementsfor these demands raised. The management believes that the ultimate outcome of these proceedings will not have a material adverseeffect on the Group’s financial position and results of operations. The Group does not expect any reimbursements in respect of theabove contingent liabilities.

(vii) In addition, the Group is subject to legal proceedings and claims, which have arisen in the ordinary course of business. The Group’smanagement reasonably does not expect that these legal actions, when ultimately concluded and determined, will have materialeffect on the Group’s results of operations or financial condition.

38. EMPLOYEE BENEFITS

The Group has classified various employee benefits as under:

(A) Defined contribution plans

During the year, the Group has recognised the following amounts in the statement of profit and loss:

(` in Lakhs)


(i) Employers’ contribution to provident fund 328 336

(ii) Employers’ contribution to employees’ state insurance 113 134

Included in ‘Contribution to Provident, Family Pension and ‘Employees’ State Insurance (Refer Note 30)

(B) Defined benefit plans

The Group operates two defined benefit plans i.e., gratuity and compensated absence for its employees. Under the gratuity plan,every employee who has completed at least five years of service gets a gratuity on departure at 15 days of last drawn salary for eachcompleted year of service.

The following table summarises the components of net benefit expenses and the provision status for respective plans:

(` in Lakhs)



(i) Assumptions

(a) Discount rate 6.74% 6.74% 7.60% 7.60%

(b) Rate of increase in compensation levels 10% 10% 5% 5%

(c) Rate of return of plan assets N.A. N.A. N.A. N.A.

(d) Expected average remaining working lives 12.55 15.04 12.90 12.90of employees (in years)




124

(` in Lakhs)



(ii) Change in the Present Value of Obligation

(a) Present value of obligation as at beginning 329 1,915 451 1769of the year

(b) Interest cost 24 136 32 123

(c) Current/Past service cost 37 127 71 334

(d) Benefit paid (35) (255) (88) (370)

(e) Actuarial (gain)/loss on obligations (155) 278 (137) 60

(f) Present value of obligation as at end of the year 200 2,201 329 1915

(iii) Amount recognised in the Balance Sheet

(a) Present value of obligation as at end of the year 200 2,201 329 1,915

(b) Fair Value of Plan Assets as at the year end - - - -

(c) (Asset) / Liability recognised in the Balance 200 2,201 329 1,915Sheet

Net liabilities recognised in the Balance Sheetaccounted for as below:

Provision non current (Refer Note 22 A) 78 1,878 171 1,649

Provision current (Refer Note 22 B) 122 323 158 266

(iv) Expenses recognised in the Statement of Profitand Loss

(a) Under Profit & Loss

Current/Past service cost 37 127 71 334

Interest cost 24 136 32 123

Acturial (gain)/loss on obligations (155) - (137) -

(94) 263 (34) 457

(b) Remeasurement-other comprehensive - 278 - 60Income (OCI)

(c) Total Expenses recognised in the Statement (94) 541 (34) 517of Profit and Loss

(v) Sensitivity analysis:(` in Lakhs)


Compensated absence Gratuity




Employee attrition rate 0 (0) 3 (3)

(` in Lakhs)





Employee turnover 2 (3) 12 (14)

The sensitivity analysis above have been determined based on a method that extrapolates the impact on defined benefit obligation asa result of reasonable change in key assumptions occurring at the end of the reporting period.



39. RELATED PARTY DISCLOSURES

In accordance with the requirements of “IND-AS 24” on the Related Party Disclosures, the transactions and Related Parties with whomtransactions have taken place during the year are as follows:

(A) Detail of related parties with whom the Company had transaction during the year.

Description of relationship Names of related partiesAssociates Hyderabad Distilleries & Wineries Pvt. Ltd.

Key Management Personnel and their relatives: Mr. Ravi Manchanda (Managing Director)Mr. Anil Vanjani (CEO w.e.f. 21.10.2019)Mr. Anil Girotra (CFO)Mr. Kewal Krishan Kohli( Sr. Vice President & Company Secretary retired w.e.f. 15.07.2019)Mr Roopesh Kumar (Company Secretary w.e.f. 15.07.19)Mr. Karamjit Singh JaiswalMs. Roshni Sanah Jaiswal

Director Mrs. Kiran Indra KapurMrs. Anjali VarmaMs. Sonya JaiswalMrs. Sushma SagarMrs. Asha Saxena

Enterprises over which Major shareholders, Milkfood Ltd.Key Management Personnel and their relatives Fast Buck Investments & Trading Pvt. Ltd.have significant influence / control : Corporate Facility Management

Galaxy Pet Packaging Pvt. Ltd.Quick Return Investments Company Ltd.Double Durable Investments Ltd.Devyani Construction Pvt. Ltd.Blue Skies Investments Private LimitedPalm Beach Investments Private LimitedSnowhite Holdings Private LimitedAshwan Buildcon LimitedHybrid Holdings Pvt. Ltd

(B) Details of transactions carried out with the related parties in the ordinary course of business:(` in Lakhs)


(i) Associates


Payments made on behalf of Associate 7 70

Repayment of loan by Associate on behalf of company 3,071 -

Loan taken 2,408 957

Repayment of loan 492 375

Loan written back (refer Note No. 35(i)) 6,979 113

Interest received (net of TDS) - 30

Other receivable amount received - 565

(ii) Key Management Personnel, director and their relatives:

(a) Mr. Ravi Manchanda






126

(` in Lakhs)


(b) Mr Anil Vanjani


Advance given 1 -

(c) Mr. Anil Girotra



(d) Mr. Kewal Krishan Kohli


Refund of advance - 1

(e) Ms. Roshni Sanah Jaiswal


Advance given 25 94


Interest receivable on advance 18 18

Payment on behalf of Company 53 7

(f) Mr. Karamjit Singh Jaiswal

Remuneration 60 194


(g) Mr. Roopesh Kumar


(h) Mrs Kiran Indira Kapur


(i) Mrs Anjali Varma


(j) Ms Sonya Jaiswal


(k) Mrs Sushma Sagar


(l) Mrs Asha Saxena


(iii) Enterprises over which Major shareholders, Key Management Personneland their relatives have significant influence / control :

(a) Milkfood Ltd.

Reimbursement of payments made on behalf of company 16 12

Advance recd agst building renovation & rent 100 -

Rental income 41 22

Decapitalisation of building rennovation amount capitalised in 59 -earlier year (including GST)

Interest paid - 4

Purchase/services received 12 69

Loan & advance received - 55

Refund of loan & advance - 48

(b) Corporate Facilities Management

Maintenance charges paid 215 197



(` in Lakhs)


(c) Galaxy Pet Packaging Pvt. Ltd.

Loan taken 6 -


Interest paid 1 -

(d) Quick Return Investment Company Ltd.

Loan taken 182 -

Repayment of loan 14


Interest paid 15 -

(e) Double Durable Investments Ltd.

Loan taken 8 -



Interest paid 1 -

(f) Devayani Construction Pvt. Ltd.

Loan taken 500 -


Interest paid 26 -

(C) Outstanding balance as at end of the year

(` in Lakhs)


(i) Associates


Inter corporate loan (104) (847)

(ii) Key Management Personnel and their relatives:

Mr. Ravi Manchanda

Receivable 26 40

Mr. Anil Vanjani

Receivable 1 -

Mr. Anil Girotra

Receivable 239 251

Mr. Karamjit Singh Jaiswal/Mrs. Shakun Jaiswal

Receivable/(Payable) (20) 1

Ms. Roshni Sanah Jaiswal

Receivable 213 227

(iii) Enterprises over which major Shareholders, Key Management Personnel andtheir relatives have significant influence / Control

Milkfood Ltd.


Fast Buck Investments & Trading Pvt. Ltd.


Galaxy Pet Packaging Pvt. Ltd.





128

(` in Lakhs)


Quick Return Investments Company Ltd.


Double Durable Investments Ltd.


Devyani Construction Pvt. Ltd.


Blue Skies Investments Private Limited

Receivable/(Payable) 2 2

Palm Beach Investments Private Limited


Snowhite Holdings Private Limited


Hybrid Holdings Private Limited


Ashwan Buildcon Limited


Footnote(s) :

(i) Related parties have been identified by the management.

(ii) Key Management Personnel remuneration does not include provision for gratuity and compensated absences which is determindfor the Company as whole.

(iii) No amounts have been witten off / provided for or written back during the year in respect of amounts receivable from orpayable to related parties except disclosed in Note 8(iv).

(iv) Remuneration paid to KMP excludes expenses incurred in the course of performance of duty.

40. SEGMENT INFORMATION

The Group’s operating segments are identified on the basis of those components of the group that are evaluated regularly by the ChiefExecutive Officer (the ‘Chief Operating Decision Maker’ as defined in Ind As 108 -’Operating Segments’), in deciding how to allocate resourcesand in assessing performance. These have been identified taking into account nature of products and services, the differing risks andreturns and the internal business reporting systems. The Group’s business segments are as under:

Beverages: Segment includes manufacturing and supply of Bottled Indian Made Foreign Liquor, Country Liquor, Industrial Alcohol andlicensing use of its IMFL brands.

Food: Segment includes manufacturing and supplies of food products and providing services for manufacture of food products.

Others: Segment includes sale of Petroleum products.

The accounting policies adopted for segment reporting are in line with the accounting polcy of the Group with following additional policies forsegment reporting.

(a) Revenue and expenses have been identified to a segment on the basis of relationship to operating activities of the segment. Revenueand expenses which relate to enterprise as a whole and are not allocable to a segment on reasonable basis have been disclosed as‘Unallocable’.

(b) Segment assets and segment liabilities represent assets and liabilities in respective segments. Investments, tax related assets andother assets and liabilities that can not be allocated to a segment on reasonable basis have been disclosed as ‘Unallocable’.



(A) Primary segment information(` in Lakhs)

Beverages Food Others Total

2019-20 2018-19 2019-20 2018-19 2019-20 2018-19 2019-20 2018-19

(i) Segment revenue

Sales, services and other income 8,477 11,210 13,420 13,231 631 484 22,528 24,925

Less : Excise duty (461) (2,499) (461) (2,499)

Inter segment sales — — — — — — — —

Unallocated income — — — — — — — —

Total revenue 8,016 8,711 13,420 13,231 631 484 22,067 22,426

(ii) Segment results

Segment results (4,429) (856) 1,394 961 (5) (7) (3,040) 98

Unallocated expenditure

Other Unallocable Expenditure net of (278) (169)Unallocable Income

Finance cost 4,211 7,259

Profit/(Loss) before exceptional items (6,973) (6,992)

Exceptional items 2,833 373

Add : Share of Net Profit/(Loss) of 477Asscociates

Profit/ (Loss) before tax (3,663) (6,619)(from continous operations)

Profit/(Loss) from discountining (61) (116)operations

Profit/(Loss) before Tax (3,724) (6,735)

Less: Tax expense: 735 (142)

Profit/ (Loss) after tax (4,459) (6,593)

(iii) Segment assets and liabilities

Segment assets 13,717 19,220 6,711 8,078 - - 20,428 27,298(refer footnote (i) below))Unallocated assets 30,728 37,532

Total assets 51,156 64,830

Segment liabilities 12,380 13,411 4,714 4,019 - - 17,094 17,430

Unallocated liabilities 29,560 38,161

Total liabilities 46,654 55,591

(iv) Other information

Capital expenditure 63 29 7 - - - 70 29

Unallocated capital expenditure 98 114

Total capital expenditure 168 143

Depreciation 341 352 494 505 - - 835 857

Unallocated depreciation 130 187

Total 965 1,044

Non - cash expenditure 4,055 1,830 - - - 4,055 1,830

Other than depreciation - -

Unallocable non cash expenditure - -

Total 4,055 1,830




130

(B) Secondary segment information(` in Lakhs)

2019-20 2018-19(i) Segment revenue


Outside India 476 462

Total 22,067 22,426

(ii) Other information

Carrying amount of segment assets by location of assets


Outside India - -

Addition to fixed assets/capital work- in- progress 168 143

Footnote(s) :

(i) Segment assets include capital work- in- progress aggregating to ` 18 Lakhs (Previous Year : ` 22 Lakhs). While most assets aredirectly attributed to individual segments, the carrying amount of certain assets used jointly by two or more segments is allocated tothe segments on a reasonable basis.

(ii) Capital expenditure pertains to additions made to fixed assets/ capital work-in-progress (including capital advances) during the year.

(iii) Unallocated assets includes land, administration building and cash & bank balances etc.

(iv) Unallocated liabilities include interest bearing liabilities, tax provisions and deferred tax liability.

(v) Non cash items include bad debts, advances and stocks written off, provision for doubtful debts & advances and fixed assets writtenoff.

(vi) Food Segment represents revenue from one customer.

41. The Group has discontinued its operation for Packaging Division with effect from April 1, 2014 and Sikandrabad Unit with effect from Sep30, 2018. During the year Sikandrabad Unit has been sold out.The disclosures as required under Indian Accounting Standard - 105 aregiven below.

(` in Lakhs)


Revenue

Miscellaneous Income 4 21

Interest Income 1 1

Liabilities/provisions no longer required written back 84 7

Total revenue 89 29

Expenses

Employee benefits expenses

Salaries, Wages, Bonus and Gratuity 7 14

Other expenses

Power and fuel - 1

Rates & taxes 13 22

Insurance - 1



Bad Debts, Advances and Stock written off 81

Provision for Doubtful Debts and advances 20

Security Expenses 5

Loss on sale of fixed assets 4



(` in Lakhs)



Miscellaneous expenses 21 94

Total expenses 150 145

Profit/(Loss) for the year (61) (116)

Less: Tax expense - -


Total Assets 46 2,163

Total Liabilities 4,655 6,557

Cash Flow from discontinuing operations included in above

- Operating activities (105) (3,935)

- Investing activities 100 3,929

- Financing activities - -

42. FAIR VALUE

Fair value measurement:

(i) All the financial assets and financial liabilities of the company are carried at amortised cost except investment. Investment in subsidiariesare carried at cost and other investments are carried at fair value.

(ii) The management assessed that the carrying values of trade and other receivables, deposit, cash and short term deposits, otherassets, borrowings, trade and other payables reasonably approximate their fair values because these instruments have short-termmaturities.

43. CAPITAL MANAGEMENT

For the purpose of the Group’s capital management, capital includes issued equity capital, securities premium and all other equity reservesattributable to the equity shareholders. The primary objective of the Group’s capital management is to ensure that it maintains a good creditrating and capital ratios in order to support its business and maximise shareholder value.

The Group monitors capital using a gearing ratio, which is net debt divided by total capital. The Group includes within net debt, all non-currentand current borrowings reduced by cash and cash equivalents and other bank balances.

(` in Lakhs)


Non-current borrowings 20,006 21,690

Current maturities of non-current borrowings 981 7,250

Current borrowings 217 1

Less: Cash and cash equivalents 1,100 951

Less: Other bank balances 7 64Net debt 20,097 27,926

Equity share capital 4,615 4,615Other equity (108) 4,624

Total capital 4,507 9,239

Gearing ratio 446% 302%

Group aims to ensure that it meets financial covenants attached to the interest-bearing borrowings that define capital structurerequirements.There have been no breaches in the financial covenants of any interest-bearing borrowings in the current year.

During the year ended March 31, 2020, and the year ended March 31, 2019, the Group disposed off/ in the process of disposing itssurplus immovable assets and has infused the fund through associate company to reduce the borrowings and fund operational losses.




132

44. FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES

The Group’s principal financial liabilities comprise borrowings, trade and other payables for running the business of the group. The Group’sprincipal financial assets include investments, trade and other receivables, cash and cash equivalents, bank balances and security depositsthat are out of regular business operations.

The Group is exposed to market risk, credit risk and liquidity risk. The Group’s senior management oversees the management of these risks.

(a) Market risk

Market risk is the risk that the fair value of future cash flows of a financial instrument that will fluctuate be-cause of changes in marketprices. Market risk comprises three types of risk i.e. interest rate risk, currency risk and other price risk, such as commodity risk.Financial Instruments affected by market risk include borrowings, trade payables.

i. Interest rate risk

Interest rate risk is the risk that the fair value or future cash flows of the Group’s financial instruments will fluctuate becauseof changes in market interest rates. The Group’s exposure to the risk of changes in market interest rate relates primarily tothe Group’s borrowings with floating interest rates.

The following table demonstrates the sensitivity to a reasonably possible change in interest rates on borrowings affected. Withall other variables held constant, the Group’s profit before tax is affected through the impact on floating rate borrowings, asfollows:

March 31, 2020 March 31, 2019

1% increase 1% decrease 1% increase 1% decreaseImpact on profit before tax (257) 257 (344) 344

ii. Foreign currency risk

Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes inforeign exchange rates. There does not seem to be any significant risk as transaction in foreign currency are very few.

As there is no significant foreign currency risk, sensitivity analysis showing impact on profit is not calculated.

iii. Commodity price risk

The Group is affected by the price volatility of certain commodities. The Group’s long standing relationships with most suppliersensure steady availability of raw materials at competitive prices. The Group is also trying to reduce cost by value engineering indry and wet goods and using standardized packing material popular and medium segment.

(b) Credit risk

Credit risk is the risk of loss that may arise on outstanding financial instruments if a counterparty default on its obligations. TheGroup’s exposure to credit risk arises majorly from loan, advances, trade and other receivables. Other financial assets like securitydeposits and bank deposits are mostly with government authorities and nationalised banks and hence, the Group does not expect anycredit risk with respect to these financial assets. With respect to trade receivables, some portion includes dues from state governmentcorporations, risk is limited and considered insignificant by the management. In respect of sale made to other than state governmentcorporation, Group provides expected credit loss on the basis of ageing of trade receivable instead of method of ECL as prescribedin Ind AS 109. The Group is exposed to risk of debts, loan and loans of ` 1564 Lakh outstanding over a period of one year.

(c) Liquidity risk

The Group’s objective is to maintain a balance between continuity of funding and flexibility through the use of bank borrowings. Thetable below summarises the maturity profile of the Group’s financial liabilities:



(` in Lakhs)

Maturities Total

Upto 1 year 1-2 years 2-3 years Above 3 years

March 31, 2020

Non-current borrowings — 691 314 19,001 20,006

Non-current other financial liabilities 660 2,688 0 3,348

Current borrowings 217 — — — 217

Trade payables 6,770 — — — 6,770

Lease Liabilities 19 3 — — 22

Other financial liabilities 5,872 — — — 5,872

Total 12,878 1354 3,002 19,001 36,235

March 31, 2019

Non-current borrowings — 196 177 20,058 20,432

Non-current other financial liabilities 1,534 641 1,472 3,647

Current borrowings 1 — — — 1

Trade payables 7,357 — — — 7,357

Other financial liabilities 11,259 — — — 11,259

Total 18,617 1,730 818 21,530 42,696

45. OTHER INFORMATION

(i) In absence of convincing evidence of future taxable profit, the Group has not recognised deferred tax asset during the year.

(ii) With Effect From April 1, 2019, the Group adopted Ind AS 116 “Leases”, applied to all lease contracts existing as on April 1, 2019using the modified method. Accordingly, comparatives for the year ended March 31, 2019 have not been retrospectively adjusted.On transition, the adoption of the new standard resulted in recognition of Right-of-Use asset (ROU) of ̀ 53 Lakhs and a correspondinglease liability of ` 53 Lakhs. The effect of this adoption has increased losses by ` 1 Lakh and reduction of EPS by INR 0.0023 pershare. The Ind AS 116 has not been applied to short-term leases of all assets that have a lease term of 12 months or less and thelease payments associated with these leases are recognized as an expense on a straight-line basis over the lease term.

(iii) The outbreak of Covid-19 pandemic is causing significant disturbance and slowdown of economic activities globally. With variousrestrictions imposed and the lockdown announced from March 24, 2020, all the operations and the manufacturing operations cameto stand still during the rest of March 2020. This impacted the performance marginally of the Group adversely for the Financial Yearended March 31, 2020. With the relaxations granted by the Government of State of Punjab, the operations of the distillery and fooddivision were resumed from April 11, 2020. Further, in view to meet the requirement of the hand santizers due to the increaseddemand of the same on account of the spread of COVID-19, the Group has launched hand sanitizers and accordingly entered intoarrangements with various parties for manufacture/ procurement of hand santizers for sales & distribution against the supply ofthe Denatured Alcohol by the Group. The product of the Group appears to be well accepted in the market as per initial reports. TheGroup is facing issues in servicing its financial obligations due to the impact of COVID-19. Loan from NBFC and Bank and the repaymentof installments of same are under moratorium till August 2020 due to Covid-19 pandemic. The Group is expecting its revisedrepayment schedule from the said institutions. Based on the current indicators of future economic conditions, the managementexpects to recover the carrying amount of the assets, however the management will continue to closely monitor any material changesto future economic conditions. Given the uncertainities, the final impact on Group’s assets in future may differ from that estimated asat the date of approval of these financial results.

(iv) Internal audit report for the half year ending 31.03.2020 has been received on 20.08.2020. Internal auditor inter alia has raisedcertain issues regarding availment of GST input credit in respect of certain matters, payment of GST under the reverse chargemechanism, Providing of documentary support in respect of the some of the sales promotion and marketing expenses, non collectionof TCS on the sale of the vehicle, Application of Sec 2(31) of Companies Act read with Acceptance of Deposits Rules 2014 regardingcertain deposits and advances from customers, Accounting of MGQ income, Non booking of interest income on the late receipt ofRoyalty income, etc,. Management is of the view that it has rightfully claimed the input credits and fully complied with the provisions ofthe GST Act in other areas. However management will take further view in respect of all these matters including taking of the legalopinion and will obtain the compliance certificate from the internal auditor by the end of September 2020.




134

(v) Enterprises consolidated as subsidiary in accordance with Indian Accounting Standrad 110 - Consolidated Financial Statements.

Name of the Subsidiary Company Country of As on As onincorporation March 31, 2020 March 31, 2019

JIL Trading Pvt. Ltd India 100% 100%

S.R.K. Investments Pvt. Ltd. India 100% 100%

Sea Bird Securities Pvt. Ltd. India 80% 80%

L.P. Investments Ltd. India 98.26% 98.26%

Yoofy Computech Pvt Ltd India 99.99% 99.99%

Natwar Liquors Pvt Ltd India 100.00% -

(vi) Significant Enterprises consolidated as Associates in accordance with Indian Accounting Standard 28 - Investment in Associatesand Joint Ventures

Name of the Associates Country of As on As onincorporation March 31, 2020 March 31, 2019

Hyderabad Distilleries & Wineries Pvt. Ltd India 33.16%* 33.16%*

*held through subsidiary

These investments have been accounted for using the equity method whereby the investment is initially recorded at cost and adjustedthereafter for the post acquisition change in the Group’s share of net assets.

(vii) Additional information as required by Schedule III to the Companies Act , 2013, of enterprises consolidated as Subsidiary/Associates:

Summary of Net Assets, Share in consolidated profit and share in Other Comprehensive income

Net assets i.e. total assets Share in profit or loss Share in other Share in total minus total liabilities comprehensive income comprehensive income

As a % of Amount As a % of Amount As a % of Amount As a % of Amountconsolidated (` in consolidated (` in consolidated (` in consolidated (` in

net assets Lakhs) net loss Lakhs) other com- Lakhs) total com- Lakhs)prehensive prehensive

Income income

31-Mar-20

Parent :

Jagatjit Industries Ltd 100.08 4,035 (99.72) (4,887) 100 (278) (99.73) (5,165)

Subsidiary :

JIL Trading Pvt Ltd (0.19) (8) (0.00) (0) (0.00) (0)

S.R.K. Investments Pvt Ltd (0.07) (3) (0.01) 9 (0.01) 9

Sea Bird Securities Pvt Ltd (0.05) (2) (0.00) (0) (0.00) (0)

L.P. Investments Ltd (4.24) (171) (0.24) (12) (0.23) (12)

Natwar Liquors Pvt Ltd 0.01 1 (0.02) (1) (0.02) (1)

Yoofy Computech Pvt Ltd 0.00 - (0.01) (1) (0.01) (1)

Sub Total 95.54 3,852 (100.00) (4,892) 100 (278) (100.00) (5,170)

Inter-Company Elimination & Consolidation 4.46 180 - 1,205Adjustments

100.00 4,032 (3,965)

Impairment of Goodwill (on account of consolidation) (1,249)

Non-controlling interest in subsidiary (4)

Share of profit/(loss) in Associate (Net off reversal 474 477of loss of ` 3 lacs related to earlier period)

Total 4,502 (4,737)



(` in Lakhs)

Net assets i.e. total assets Share in profit or loss Share in other Share in total minus total liabilities comprehensive income comprehensive income

As a % of Amount As a % of Amount As a % of Amount As a % of Amountconsolidated (` in consolidated (` in consolidated (` in consolidated (` in

net assets Lakhs) net loss Lakhs) other com- Lakhs) total com- Lakhs)prehensive prehensive

Income income

31-Mar-19

Parent :

Jagatjit Industries Ltd 99.63 9,201 (99.99) (6,588) 100 (39) (99.99) (6,627)

Subsidiary :

JIL Trading Pvt Ltd (0.07) (8) (0.00) (0) (0.00) (0)

S.R.K. Investments Pvt Ltd (0.09) (10) (0.01) (4) (0.01) (4)

Sea Bird Securities Pvt Ltd (0.02) (2) (0.00) (0) (0.00) (0)

L.P. Investments Ltd 9.61 1,085 (0.00) (1) (0.00) (1)

Yoofy Computech Pvt Ltd 0.00 - (0.00) (0) (0.01) (0)

Sub Total 109.06 10,266 (100.00) (6,593) 100 (39) (100.00) (6,632)

Inter-Company Elimination & Consolidation (9.06) (1,023) - -Adjustments

100.00 9,243

Non-controlling interest in subsidiary (4)

Share of profit/(loss) in Associate -

Total 9,239 (6,632)

(viii) Previous year figures have been reclassified/regrouped wherever necessary to this year’s classification.




136

Form AOC-1(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures

Part “A”: Subsidiaries(All amount in Lacs unless otherwise stated)

Sl. No. Particulars Details Details Details Details Details Details

1 Name of the subsidiary JIL Trading L.P. Sea Bird S. R. K. Yoofy Computech Natwar LiquorsPrivate Limited Investments Securities Investments Private Limited Private Limited

Limited Private Limited Private Limited (Formerly Known as (Incorporated on JILI Hotels & Resorts 6th February,

Private Limited) 2020)

2 Reporting period 31st March, 2020 31st March, 2020 31st March, 2020 31st March, 2020 31st March, 2020 31st March, 2020

3 Share Capital 1.00 1038.25 1.00 1.00 1.00 1.00

4 Reserves & Surplus (9.44) (1213.39) (3.86) (4.16) (0.96) (0.30)

5 Total Assets 0.22 13.07 81.00 1.76 0.09 0.82

6 Total Liabilities 0.22 13.07 81.00 1.76 0.09 0.82

7 Investments - 1.83 81.00 - - -

8 Turnover - 0.02 - - - -

9 Profit Before Taxation (0.24) (1.27) (0.23) 7.53 (0.24) (0.30)

10 Provision for Taxation - - - - - -

11 Profit After Taxation (0.24) (1.27) (0.23) 7.53 (0.24) (0.30)

12 Proposed Dividend - - - - - -

13 % of shareholding 100.00 98.26 80.00 100.00 99.99 100.00

Notes :1. Names of subsidiaries which are yet to commence operations - Nil2. Name of subsidiary which has been liquidated or sold during the year - Nil

Part “B”: Associates and Joint VenturesStatement pursuant to Section 129 (3) of the Companies Act, 2013 related to Associate Companies and Joint Ventures

(All amount in Lacs unless otherwise stated)

Sl. Name of associate Hyderabad Distilleries andNo. Wineries Private Limited

1. Latest audited Balance Sheet Date 31st March, 2020

2. Shares of Associate held by the Company at the year end :

(i) Number of Shares 3124*

(ii) Amount of Investment 3.12*

(iii) Extent of holding % 32.88*

3. Description of how there is significant influence *

4. Reason why the associate is not consolidated Consolidated

5. Net worth attributable to shareholding as per latest audited Balance Sheet 473.81

6. Profit / Loss for the year

i. Considered in Consolidation 477

ii. Not considered in Consolidation 1242

* The Company holds 1,650 equity shares of ` 100 each aggregating to ` 1,65,000. M/s L. P. Investments Limited, (a subsidiary Company in whichJagatjit Industries Limited holds 98.26% of capital) is holding 1,500 equity shares of ` 100 each aggregating to ` 1,50,000 (the indirect holding of theCompany amounts to 1,474 equity shares). Taken together, direct and indirect holding of the Company aggregates to 3,124 equity shares of ` 100/-each amounting to ` 3,12,400 which is 32.88% of the Share Capital of M/s Hyderabad Distilleries and Wineries Private Limited.

Notes :1. Names of associates or joint ventures which are yet to commence operations – Nil2. Names of associates or joint ventures which have been liquidated or ceased during the year – Nil

For and on behalf of the Board of Directors ofJAGATJIT INDUSTRIES LIMITED

Roopesh Kumar Anil Vanjani Anil Girotra Ravi Manchanda Sushma SagarPlace: New Delhi Company Secretary Chief Executive Officer Chief Financial Officer Managing Director DirectorDate: September 3, 2020 DIN: 00152760 DIN: 02582144

Annual Report 2019-2020 7mm spine





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Jagatjit Industries Limited

Evolve. Innovate. Scale.

ANNUAL REPORT 2019-20

www.jagatjit.comJagatjit Nagar,

Dist. Kapurthala144 802, Punjab

P: 0181 2783112E: [email protected]

CIN No.: L15520PB1944PLC001970

Annual Report 2019-2020 7mm spineback front

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Evolve. Innovate. Scale. - Jagatjit